Question

The form below shows the amounts that appear in the Earnings to Date column of the employees' earnings records for 10 full- and part-time workers in Unger Company. These amounts represent the cumulative earnings for each worker as of October 5, the company's last payday. The form also gives the gross amount of earnings to be paid each worker on the next payday, October 12.

In the state where Unger Company is located, the tax rates and bases are as follows:

Tax on Employees:
	FICA—OASDI	6.2% on first $127,200
	FICA—HI	1.45% on total earnings
	SUTA	0.5% on first $8,000
Tax on Employer:
	FICA—OASDI	6.2% on first $127,200
	FICA—HI	1.45% on total earnings
	FUTA	0.6% on first $7,000
	SUTA	1.8% on first $8,000

In the appropriate columns of the form shown below, do the following:

1.   Compute the amount to be withheld from each employee's earnings on October 12 for (a) FICA—OASDI, (b) FICA—HI, and (c) SUTA, and determine the total employee taxes.
2.   Record the portion of each employee's earnings that is taxable under FICA, FUTA, and SUTA, and calculate the total employer's payroll taxes on the October 12 payroll.

If an amount box does not require an entry, leave it blank. If required, round your answers to the nearest cent. Enter the tax rates as decimals, carried out to four decimal places when required.

UNGER COMPANY
		Gross		Taxes to Be Withheld from Employees' Earnings Under				Employer Taxes: Portion of Employees' Earnings Taxable Under
	Earnings to	Earnings		FICA				FICA
Employee	Date	Oct. 12		OASDI	HI	SUTA		OASDI	HI	FUTA	SUTA
1. Weiser, Robert A.	$127,500	$1,790		$	$	$		$	$	$	$
2. Stankard, Laurie C.	14,950	295
3. Grow, Joan L.	4,060	240
4. Rowe, Paul C.	8,190	235
5. McNamara, Joyce M.	7,460	195
6. O'Connor, Roger T.	$126,910	1,810
7. Carson, Ronald B.	8,905	280
8. Kenny, Ginni C.	4,325	175
9. Devery, Virginia S.	57,010	590
10. Wilson, Joe W.	3,615	205
Total employee taxes				$	$	$
Total taxable earnings								$	$	$	$
Applicable tax rate (enter as decimals, not percentages)
Totals								$	$	$	$
Total payroll taxes								$

Answer 1

	Unger Company
				Taxes to be withheld From employees' Earnings Under			Employer Taxes: Portion of Employees' Earnings Taxable Under
		Earnings to Date	Gross Earnings - Oct 12	FICA			FICA
				OASDI	HI	SUTA	OASDI	HI	FUTA	SUTA
	Employee
1	Weiser Robert A	$127,500	$1,790		$25.96			$25.96
2	Stankard Laurie C	$14,950	$295	$18.29	$4.28		$18.29	$4.28
3	Grow Joan L	$4,060	$240	$14.88	$3.48	$1.20	$14.88	$3.48	$1.44	$4.32
4	Rowe Paul C	$8,190	$235	$14.57	$3.41		$14.57	$3.41
5	McNamara Joyce M	$7,460	$195	$12.09	$2.83	$0.98	$12.09	$2.83		$3.51
6	O'Conner Roger T	$126,910	$1,810	$17.98	$26.25		$17.98	$26.25
7	Carson, Ronald B.	$8,905	$280	$17.36	$4.06		$17.36	$4.06
8	Kenny, Ginni C	$4,325	$175	$10.85	$2.54	$0.88	$10.85	$2.54	$1	$3.15
9	Devery Virginia S	$57,010	$590	$36.58	$8.56		$36.58	$8.56
10	Wilson Joe W	$3,615	$205	$12.71	$2.97	$1.03	$12.71	$2.97	$1.23	$3.69
	Total Employee Taxes			$155.31	$84.32	$4.08
	Total Taxable Earnings						$2,505	$5,815	$620	$815
	Applicable tax rate			0.062	0.0145	0.006	0.062	0.0145	0.006	0.018
	Totals						$155.31	$84.32	$3.72	$14.67
	Total Payroll taxes						$258.02

For OASDI - earning to date of Weiser exceeds 127200 thus no OASDI Will be deducted from his wages

For O'conner only on $290 OASDI is deducted, as the remaining amount exceeds the limit of $127200