The payroll records of Software Inc. for the week ending October 7, the 40th week in the year, show the following:

Required:

1. Complete a work sheet with the following column headings: Employee

3 columns for Earnings for Week:

Use one for Regular Pay.

Use one for Overtime Premium Pay. (The company pays time-and-a-half for overtime for all employees below the supervisory level.)

Use one for Total for Week.

Total Earnings through 40th Week

FICA Taxable Earnings

FICA

Income Tax Withheld

Net Earnings

2. Prepare journal entries for the following:

a. Payroll for the 40th week.

b. Payment of payroll for the week.

c. Distribution of the payroll costs, assuming that overtime premium is charged to all jobs worked on during the period.

d. Employer's payroll tax liability.

3. The company carries a disability insurance policy for the employees at a cost of $15 per week for each employee.

Journalize the employer's cost of insurance premiums for the week.

Transcribed Image Text:

Salary or Wage per 40-Hour Week Worked Withheld Gross Earnings Income through 39th Week Tax Hours Employee Classification Allen President $2,489 40 $488 $109,560 Devine Vice President- 2,238 99,500 40 402 Administration Fiorelli 180 Supervisor- Production 700 40 27,300 oClock Factory-Direct 500 48 150 19,820 O'Reilly Factory-Direct 400 46 160 17,200 Pawlukiewicz Factory-Direct 400 44 110 16,600 Surdick Factory-Direct 380 42 120 15,200 Trebbi Factory-Indirect 300 42 80 7,800 Webb Factory-Indirect 300 42 60 6,600