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Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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I need help with the following questions referring to the image below.

Highridge homes has the following payroll information for the week ended Feburary 21:

Taxable earnings for Social Security are based on the first $118,500. Taxable earnings for Medicare are based on all earnings. Taxable earnings for federal and state unemployment are based on the first $7,000. Employees are paid time-and-a-half for work in excess of 40 hours per week. Round amounts to the nearest penny.

Required

1. Complete the payroll register. The Social Security tax rate is 6.2 percent, and the Medicare tax rate is 1.45 percent. Begin payroll checks with No. 2080.

2. Prepare a general journal entry to record the payroll. The firm's general ledger contains a Wages Expense account and a Wages Payable account.

3. Assuming that the firm has transferred funds from its regular bank account to its special payroll bank account and that this entry has been made, prepare a general journal entry to record the payment of wages.

**Weekly Earnings and Federal Income Tax Summary**

Below is a table that outlines the earnings and tax details for different individuals for a specific week:

| Name | Earnings at End of Previous Week | Daily Time | Pay Rate | Federal Income Tax |
|-------------|----------------------------------|------------|----------|--------------------|
| | | S | M | T | W | T | F | S | | |
| Arthur, P. | 7,800.00 | 8 | 8 | 8 | 8 | 8 | 8 | 8 | 45.00 | 226.78 |
| Bills, D. | 2,060.00 | 8 | 8 | 8 | 8 | 8 | | | 12.50 | 26.00 |
| Carney, W. | 2,085.00 | 8 | 8 | 8 | 8 | 8 | | | 12.95 | 27.00 |
| Dorn, J. | 748.00 | 8 | 8 | 8 | 8 | 8 | | | 22.00 | 11.00 |
| Edgar, L. | 2,687.00 | 8 | 8 | 8 | 8 | 8 | 8 | 8 | 15.00 | 37.00 |
| Fitzwilson, G. | 4,150.00 | 8 | 8 | 8 | 8 | 8 | 8 | 8 | 23.00 | 125.00 |

**Description:**

- **Earnings at End of Previous Week:** Indicates the total earnings accumulated by the end of the prior week.
- **Daily Time:** Shows the number of hours worked each day from Sunday to Saturday.
- **Pay Rate:** The hourly wage for each individual.
- **Federal Income Tax:** The amount deducted from each person's earnings as a part of federal taxes.

This table can help compare weekly activities and financial deductions for different workers, shedding light on their workloads and financial commitments.

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