BUSINESS

6–9A.          Wages…………………………………………………………………

 

FICA Taxes Payable—OASDI………………………….

 

FICA Taxes Payable—HI…………………………………

 

Employees FIT Payable…………………………………..

 

Employees SIT Payable…………………………………..

 

Group Insurance Premiums Collected……………….

 

Cash………………………………………………………………

 

 

 

Payroll Taxes……………………………………………………….

 

FICA Taxes Payable—OASDI………………………….

 

FICA Taxes Payable—HI…………………………………

 

FUTA Taxes Payable………………………………………

 

SUTA Taxes Payable………………………………………

 

 

 

On December 31, 20–, Karmansky Company needed to record its accrued wages for year-end.  If December 31 is a Tuesday then Karmansky Company must account for  two days of wages.  The company operate on a five day work week, the prior week’s gross pay (December 26th payday) was $32,650 and the net pay was $21,330..  Journalize the adjusting  entry to be made on December 31 for the accrued wages.

 

 

 

DR             CR

 

6–11A.      Wages…………………………………………………………………

 

Wages Payable……………………………………………….

 

 

 

 

 

In Oregon employers who are covered by the state workers’ compensation law withhold employee contributions from the wages of covered employees at the rate of 3.3 cents for each hour or part of an hour that the worker is employed.  Every covered employer is also assessed 3.3 cents per hour for each worker employer for each hour or part of an hour.  The employer employee contributions for worjkers’ compensation are collected monthly, quarterly, or annually by the employer’s insurance carrier, according to a schedule agreed upon by the employer and the carrier.  The insurance carrier remits the contributions to the state’s Workers’ Compensation Department.

 

 

 

Certez Company a covered employer in Oregon, turns over the employer employee workers’ compensation contributions to its insurance carrier by the 15th of each month for the preceding month.  During the month of July, the number of full-time emplyee hours worked by the company’s employees was 8270; the number of part-time employee hours was 1950.

 

 

 

  1. The amount the companby should have withheld from its full and part time employees during the month of July for workers’ compensation isnurance is $ ____.

     

    6–13A.  (a)Full-time employee-hours…………………………………………………………

    Part-time employee-hours………………………………………………………..

    Total…………………………………………………………………………………

    Contribution rate……………………………………………………………………..         ×   0.033

    July withholding………………………………………………………………………

 

 

 

The title you would give to the general ledger liability account to which the amount withheld from the employees’ earnings would be credited is:   ______________.

 

 

 

(b)Workers Compensation Contributions Collected, Workers Compensation Payments Withheld, or Workers Compensation Contributions Payable*

 

 

 

Journalize the entry on July 31 to record the employer’s liability for workers’ compensation insurance for the month.

 

 

 

(c)Workers Compensation Insurance Expense…………….

 

Workers Compensation Contributions

 

Payable………………………………………………………….

 

 

 

Full-time employee-hours………………………………………

 

Part-time employee-hours……………………………………..

 

Total………………………………………………………………

 

Contribution rate…………………………………………………..         ×  0.033

 

Employer’s liability for July…………………………………….

 

 

 

 

 

 

 

Journalize the entry on August 15 to record payment to the insurance carrier of the amount withheld from the employees’ earnings for workers; compensation insurance and the amount of the employer’s liability.

 

 

 

(d)*Workers Compensation Contributions Collected……..

 

Workers Compensation Contributions Payable……….

 

Cash…………………………………………………………….

 

 

 

During 2014 Jeff Smallwood worked for two different employers.  Until May, he worked for Rowland Construction Co. In Ames Iowa, and earned $22,000.  The state unemployment rate for Rowland is 4.6%.  He then changed jobs and worked for Ford Improvement Co. In Topeka Kansas, and earned $29,500 for the rest of the year.  The state unemployment rate for Ford is 5.1%.  Determine the unemployment taxes (FUTA and SUTA) that would be paid by:

Rowland

5–8A.  (a)       FUTA tax…………………………………………………… $X,XXX × X.XXX    =   $XX.XX

SUTA tax………………………………………………… $XX,XXX × X.XXX    =   X,XXX.XX

Ford Improvement                                                                                           Total    = $X,XXX.XX

 

(b)       FUTA tax…………………………………………………… $X,XXX × X.XXX    =   $XX.XX

SUTA tax…………………………………………………… $X,XXX × X.XXX    =   XXX.XX

Total    =$XXX.XX

Peroni Co. paid wages of $170,900 this year.  Of this amount, $114,000 was taxable for net FUTA and SUTA purposes.  The state’s contribution tax rate is 3.1% for Peroni Co.  Due to cash flow problems, the company did not make any SUTA payments until after the Form 940 filing date.  Compute

 

5–10A.  (a)       $114,000 × 0.031 × 90%………………………………………………….          $X,XXX.XX

$114,000 × 0.023 (additional credit to 5.4%)……………………             X,XXX.XX

Total FUTA tax credit……………………………………………………….          $X,XXX.XX

 

(b)       $114,000 × 0.060…………………………………………………………….            $X,XXX.XX

Less: Credit against tax [see (a) above]…………………………..            (X,XXX.XX)

Net FUTA tax…………………………………………………………………..            $X,XXX.XX

 

(c)        Net FUTA tax…………………………………………………………………..          $X,XXX.XX

FUTA tax without penalty: $114,000 × 0.006…………………..                XXX.XX

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