Prepare the journal entries as of January 12 to record the payroll and the payroll taxes for the week ending January 8. Credit Salaries Payable for the total net pay.
Use the following tax rates and bases: employer’s FICA—OASDI, 6.2% on the first $117,000; employer’s FICA—HI, 1.45% on total earnings; FUTA, 0.6% on the first $7,000; and SUTA, 3.6785% on the first $8,500.
If an amount box does not require an entry, leave it blank. If required, round your answers to the nearest cent.
Olney Company is a small manufacturing firm located in Allentown, Pennsylvania. The company has a workforce of both hourly and salaried employees. Each employee is paid for hours actually worked during each week, with the time worked being recorded in quarter-hour increments. The standard workweek consists of 40 hours, with all employees being paid time and one-half for any hours worked beyond the 40 regular hours.
Wages are paid every Friday, with one week’s pay being held back by the company. Thus, the first payday for Olney Company is January 14 for the workweek ending January 8 (Saturday).
| The total deductions for employees’ payroll is shown below. | |||||||
|---|---|---|---|---|---|---|---|
| OASDI | $597.68 | ||||||
| HI | 139.77 | ||||||
| FIT | 772.76 | ||||||
| SIT | 295.96 | ||||||
| SUTA | 6.76 | ||||||
| CIT | 128.19 | ||||||
| Simple deductions | 440.00 | ||||||
| Group insurance | 6.80 | ||||||
| Health insurance | 16.50 | ||||||
| Total deductions | 2,404.42 | ||||||
Below is the information provided from the payroll register of Olney Company, Inc.
| OLNEY COMPANY, INC. Payroll Register |
|||||||
|---|---|---|---|---|---|---|---|
| Time Card No. | Name | GRP. INS. | HEALTH INS. | CK. NO. | AMT. | ||
| 11 | Mangino, R. | $0.85 | $1.65 | 313 | $545.81 | ||
| 12 | Flores, I. | 0.85 | 1.65 | 314 | 718.97 | ||
| 13 | Palmetto, C. | 1.65 | 315 | 527.59 | |||
| 21 | Waters, R. | 0.85 | 1.65 | 316 | 785.16 | ||
| 22 | Kroll, C. | 0.85 | 1.65 | 317 | 711.12 | ||
| 31 | Ruppert, C. | 0.85 | 1.65 | 318 | 651.49 | ||
| 32 | Scott, W. | 0.85 | 1.65 | 319 | 606.96 | ||
| 33 | Wickman, S. | 1.65 | 320 | 572.14 | |||
| 51 | Foley, L. | 0.85 | 1.65 | 321 | 970.20 | ||
| 99 | Olney, M. | 0.85 | 1.65 | 322 | 1,145.94 | ||
| Total | |||||||
