1 answer

Payroll Accounting Jet Enterprises has the following data available for its April 30, 2019, payroll: Wages...

Question:

  1. Payroll Accounting

    Jet Enterprises has the following data available for its April 30, 2019, payroll:

    Wages earned $485,000 *
    Federal income taxes withheld 92,300

    * All subject to Social Security and Medicare matching and withholding of 6.2% and 1.45%, respectively.

    Federal unemployment taxes of 0.70% and state unemployment taxes of 0.90% are payable on $405,700 of the wages earned.

    Required:

    If required, round your answers to the nearest cent.

    1. Compute the amounts of taxes payable and the amount of wages that will be paid to employees. Enter amounts as positive numbers.

    Social Security $
    Medicare $
    Federal unemployment $
    State unemployment $
    Net pay $

    Feedback

    Prepare the journal entries to record the wages earned and the payroll taxes. If an amount box does not require an entry, leave it blank.

    Apr. 30
    • Federal Income Taxes Withholding Payable
    • Medicare Taxes Payable (Employee)
    • Social Security Taxes Payable (Employee)
    • Wages Expense
    • Wages Payable
    • Federal Income Taxes Withholding Payable
    • Interest Receivable
    • Medicare Taxes Expense (Employer)
    • State Unemployment Taxes Expense
    • Wages Expense
    • Federal Unemployment Taxes Expense
    • Interest Payable
    • Social Security Taxes Expense (Employer)
    • Social Security Taxes Payable (Employee)
    • Wages Receivable
    • Federal Unemployment Taxes Expense
    • Medicare Taxes Expense (Employer)
    • Medicare Taxes Payable (Employee)
    • State Unemployment Taxes Expense
    • Wages Expense
    • Cash
    • Interest Expense
    • Social Security Taxes Expense (Employer)
    • State Unemployment Taxes Expense
    • Wages Expense
    (Record wages and liabilities)
    Apr. 30
    • Federal Unemployment Taxes Expense
    • Interest Expense
    • Income Taxes Expense
    • Medicare Taxes Payable (Employer)
    • Social Security Taxes Payable (Employer)
    • Accounts Payable
    • Medicare Taxes Payable (Employer)
    • State Unemployment Taxes Expense
    • State Unemployment Taxes Payable
    • Social Security Taxes Payable (Employer)
    • Accounts Payable
    • Interest Receivable
    • Social Security Taxes Expense
    • Social Security Taxes Payable
    • Wages Payable
    • Cash
    • Federal Income Taxes Withholding Payable
    • Federal Unemployment Taxes Payable
    • Medicare Taxes Expense
    • Medicare Taxes Payable
    • Cash
    • Federal Unemployment Taxes Expense
    • Federal Unemployment Taxes Payable
    • State Unemployment Taxes Expense
    • Wages Expense
    • Accounts Receivable
    • Federal Unemployment Taxes Expense
    • Interest Payable
    • State Unemployment Taxes Expense
    • State Unemployment Taxes Payable
    • Federal Unemployment Taxes Expense
    • Income Taxes Expense
    • Social Security Taxes Expense (Employer)
    • Social Security Taxes Payable (Employer)
    • State Unemployment Taxes Expense
    • Federal Income Taxes Withholding Payable
    • Federal Unemployment Taxes Expense
    • Medicare Taxes Payable (Employer)
    • Social Security Taxes Expense (Employer)
    • Wages Expense
    (Record employer payroll taxes)

    Feedback

    B) Conceptual Connection: Jet would like to hire a new employee at a salary of $65,000. Assuming payroll taxes are as described above (with unemployment taxes paid on the first $9,000) and fringe benefits (e.g., health insurance, retirement, etc.) are 25% of gross pay, what will be the total cost of this employee for Jet? Round your answer to two decimal places.
    $

  2. Mason Auto Repair specializes in the repair of foreign car transmissions. To encourage business, Mason offers a 6-month warranty on all repairs. The following data are available for 2019:

    Transmissions repaired, 2019 3,100
    Expected frequency of warranty claims 0.03 per repair
    Actual warranty claims, 2019 $27,500
    Estimated warranty liability, 1/1/19 $21,900
    Estimated cost of each warranty claim $270

    Assume that warranty claims are paid in cash.

    Required:

    B. Compute the warranty expense for 2019.
    $

    C. Prepare the entry to record the payment of the 2019 warranty claims.

    (Record payment of claims)

    3. Conceptual Connection: What is the December 31, 2019, balance in the estimated warranty liability account?
    $

    Why has the balance in the estimated warranty liability account changed from January 1, 2019?

    The balance has because more claims were than were through warranty expense.


Answers

Solved Question 1 as per HOMEWORKLIB POLICY. Please post second one separately

Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you.
Part 1 Social Security: $485,000 × 0.062 = $     30,070
Medicare: $485,000 × 0.0145 = $        7,033
Federal unemployment: $405,700 × 0.007 = $        2,840
State unemployment: $405,700 × 0.009 = $        3,651
Net pay = $485,000 – $92,300 – $30,070 – $7,032.50 = $355,597.50
Journal
Date Account and Explanation Debit Credit
Apr 30 Wages Expense $                485,000
     Federal Income Taxes Withholding Payable $        92,300
     Social Security Taxes Payable (Employee) $        30,070
     Medicare Taxes Payable (Employee) $          7,033
     Cash $      355,598
(Record wages and liabilities)
Apr 30 Federal Unemployment Taxes Expense $                    2,840
State Unemployment Taxes Expense $                    3,651
Social Security Taxes Expense $                  30,070
Medicare Taxes Expense $                    7,033
     Federal Unemployment Taxes Payable $          2,840
     State Unemployment Taxes Payable $          3,651
     Social Security Taxes Payable (Employer) $        30,070
     Medicare Taxes Payable (Employer) $          7,033
(Record employer payroll taxes)
Part 2
Pay 100%
Social Security 6.20%
Medicare 1.45%
Fringe Benefits 25.00%
132.65% ×   $65,000 = $                                                      86,222.50
Federal Unemployment: $9,000 × 0.007 = $                                                             63.00
State Unemployment: $9,000 × 0.009 = $                                                             81.00
$                                                      86,366.50 Sl
.

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