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Question: 1 calculate payroll breakin away company has three employeesa consultant...

Question details

1. Calculate Payroll

Breakin Away Company has three employees-a consultant, a computer programmer, and an administrator. The following payroll information is available for each employee:

Consultant Computer Programmer Administrator
Regular earnings rate $2,910 per week $30 per hour $44 per hour
Overtime earnings rate Not applicable 1.5 times hourly rate 2 times hourly rate
Number of withholding allowances 3 2 1

For the current pay period, the computer programmer worked 60 hours and the administrator worked 50 hours. The federal income tax withheld for all three employees, who are single, can be determined by adding $356.90 to 28% of the difference between the employee's amount subject to withholding and $1,796.00. Assume further that the social security tax rate was 6%, the Medicare tax rate was 1.5%, and one withholding allowance is $70.

Determine the gross pay and the net pay for each of the three employees for the current pay period. Assume the normal working hours in a week are 40 hours. If required, round your answers to two decimal places.

Consultant Computer Programmer Administrator
Gross pay $ $ $
Net pay $ $ $


Summary Payroll Data

In the following summary of data for a payroll period, some amounts have been intentionally omitted:

1. At regular rate ?
2. At overtime rate $65,100
3. Total earnings ?
4. Social security tax 26,040
5. Medicare tax 6,510
6. Income tax withheld 110,700
7. Medical insurance 15,000
8. Union dues ?
9. Total deductions 161,000
10. Net amount paid 273,000
Accounts debited:
11. Factory Wages 230,000
12. Sales Salaries ?
13. Office Salaries 86,800

a. Calculate the amounts omitted in lines (1), (3), (8), and (12).

(1) $
(3) $
(8) $
(12) $

b. Journalize the entry to record the payroll accrual. If an amount box does not require an entry, leave it blank.

c. Journalize the entry to record the payment of the payroll.

The payroll register for Gamble Company for the week ended April 29 indicated the following:

Salaries $1,440,000
Social security tax withheld 86,400
Medicare tax withheld 21,600
Federal income tax withheld 288,000

In addition, state and federal unemployment taxes were calculated at the rate of 5.4% and 0.6%, respectively, on $244,000 of salaries.

A. Journalize the entry to record the payroll for the week of April 29.*
B. Journalize the entry to record the payroll tax expense incurred for the week of April 29.*
* Refer to the Chart of Accounts for exact wording of account titles.
Gamble Company
General Ledger
110 Cash
111 Accounts Receivable
112 Interest Receivable
113 Notes Receivable
115 Merchandise Inventory
116 Supplies
118 Prepaid Insurance
120 Land
123 Building
124 Accumulated Depreciation-Building
125 Office Equipment
126 Accumulated Depreciation-Office Equipment
210 Accounts Payable
213 Interest Payable
214 Notes Payable
215 Salaries Payable
216 Social Security Tax Payable
217 Medicare Tax Payable
218 Employees Federal Income Tax Payable
219 Employees State Income Tax Payable
221 Retirement Savings Deductions Payable
224 Federal Unemployment Tax Payable
225 State Unemployment Tax Payable
226 Vacation Pay Payable
227 Unfunded Pension Liability
228 Product Warranty Payable
310 Owner, Capital
311 Owner, Drawing
312 Income Summary
410 Sales
610 Interest Revenue
510 Cost of Merchandise Sold
520 Salaries Expense
524 Depreciation Expense-Building
525 Delivery Expense
526 Repairs Expense
529 Selling Expenses
531 Rent Expense
532 Depreciation Expense-Office Equipment
533 Insurance Expense
534 Supplies Expense
535 Payroll Tax Expense
536 Vacation Pay Expense
537 Pension Expense
538 Cash Short and Over
539 Product Warranty Expense
540 Miscellaneous Expense
710 Interest Expense
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