FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Problem 9-3B  Payroll expenses, withholdings, and taxes  P2  P3

Fishing Guides Co. has four employees. FICA Social Security taxes are 6.2% of the first $128,400 paid to each employee, and FICA Medicare taxes are 1.45% of gross pay. Also, for the first $7,000 paid to each employee, the company’s FUTA taxes are 0.6% and SUTA taxes are 5.4%. The company is preparing its payroll calculations for the week ended September 30. Payroll records show the following information for the company’s four employees.

 

In addition to gross pay, the company must pay 60% of the $50 per employee weekly health insurance; each employee pays the remaining 40%. The company also contributes an extra 5% of each employee’s gross pay (at no cost to employees) to a pension fund.

Required

Compute the following for the week ended September 30 (round amounts to the nearest cent):

  1. Employer’s FUTA taxes.

    (5) $2.10

  2. Employer’s SUTA taxes.

  3. Each employee’s net (take-home) pay.

    (7) Total net pay, $4,565.81

  4. Employer’s total payroll-related expense for each employee.

 

first $12
päid to
Fishing Guides Co. has four employees. FICA Social Security taxes are 6.
each employee, and FICA Medicare taxes are 1.45% of gross pay. Also, for the first $7,000 paid to each
employee, the company's FUTA taxes are 0.6% and SUTA taxes are 5.4%. The company is preparing its
payroll calculations for the week ended September 30. Payroll records show the following information for
the company's four employees.
A
B
Gross Pay
through Sep. 23
$126,800
Current Week
Name
Gross Pay
$2,500
Income Tax Withholding
$198
3
Ahmed
4
Carlos
126,885
1,515
182
Jun
6,650
475
32
6.
Marie
23,700
1,000
68
expand button
Transcribed Image Text:first $12 päid to Fishing Guides Co. has four employees. FICA Social Security taxes are 6. each employee, and FICA Medicare taxes are 1.45% of gross pay. Also, for the first $7,000 paid to each employee, the company's FUTA taxes are 0.6% and SUTA taxes are 5.4%. The company is preparing its payroll calculations for the week ended September 30. Payroll records show the following information for the company's four employees. A B Gross Pay through Sep. 23 $126,800 Current Week Name Gross Pay $2,500 Income Tax Withholding $198 3 Ahmed 4 Carlos 126,885 1,515 182 Jun 6,650 475 32 6. Marie 23,700 1,000 68
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