Question

Blitzen Marketing Research paid its weekly and monthly payroll on January 31. The following information is available about the payroll:
Item Amount
Monthly salaries .................... $237,480
Hourly wages ..................... 585,000
FICA:
Social Security (both Employee & Employer) .........6.20%
Medicare (both Employee & Employer) ............1.45%
Withholding for income taxes ..............$108,500
Federal unemployment taxes .................1,200
State unemployment taxes ..................4,000
Blitzen will pay both the employer’s taxes and the taxes withheld on April 15.

Required:
1. Prepare the journal entries to record the payroll payment and the incurrence of the associated expenses and liabilities.
2. What is the employees’ gross pay? What amount does Blitzen pay in excess of gross pay as a result of taxes?
3. How much is the employees’ net pay as a percentage of total payroll related expenses?
4. If another employee can be hired for $60,000 per year, what would be the total cost of this employee to Blitzen?


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  • CreatedSeptember 22, 2015
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