Module $05$ Written Assignment $$ Payroll Transactions

Module $05$ Content

Your Sales and Service company has become so successful over the past months that you have decided to hire two part$-$time employees to assist you with sales and office duties. In researching your computerized accounting program, you have found that it does not include the options to perform payroll calculations and print paychecks. To computerize the payroll calculations and assist you in drafting the journal entries, you decide to use Microsoft Excel for the necessary payroll functions.

Complete the following using the Module $05$ Payroll Transactions Written Assignment template. Module $05$ Assignment $-$ Payroll Transactions

$1.$ Calculate payroll for Karen Rodriguez and Adam Seyd for the June $14$th and June $28$th payrolls.

These employees are paid bi$-$weekly, meaning every other week. Cash

FICA Tax Payable

June $14$ Payroll Karen Rodriguez Adam Seyd Total Federal Income Tax Payable

Gross Pay State Income Tax Payable

FICA Tax Federal Unemployment Payable

Federal Income Tax State Unemployment Payable

State Income Tax Wages Expense

Net Pay Payroll Tax Expense

June $28$ Payroll Karen Rodriguez Adam Seyd Total

Gross Pay

FICA Tax

Federal Income Tax

State Income Tax

Net Pay

$2.$ Journalize the transactions necessary to record the payrolls.

Date Account Debit Credit

$6/14$ Wages Expense

FICA Tax Payable

Federal Income Tax Payab;e

State Income Tax Payable

Cash

$6/14$ Payroll Tax Expense

FICA Tax Payable

Federal Unemployment Payable

State Unemployment Payable

$6/28$ Wages Expense

FICA Tax Payable

Federal Income Tax Payab;e

State Income Tax Payable

Cash

$6/28$ Payroll Tax Expense

FICA Tax Payable

Federal Unemployment Payable

State Unemployment Payable

Totals

$3.$ Address the following questions:Calculate payroll for Karen Rodriguez and Adam Seyd for the June $14$th and June $28$th payrolls. These employees are paid bi$-$weekly, meaning every other week.

Journalize the transactions necessary to record the payroll.

Address the following questions:

What is the total cost to the company of having these two employees for the month of June?

Calculate the cost of adding one more employee for $10$ hours per week $(40$ hours total for June$)$ at $$15$ per hour. Remember to consider the employee payroll portion as well as the employer tax obligation.

Would it be more cost effective to add the additional part$-$time employee or to distribute the additional $40$ hours needed to the current part$-$time employees? Explain using your calculations to justify your response.

The following information will be necessary in your calculations:

Employee Information

Karen Ramierz $$20/$hour hourly rate

Pay Period Ending June $14$: $24$ hours worked

Pay Period Ending June $28$: $22$ hours worked

Adam Settervig $$18/$hour hourly rate

Pay Period Ending June $14$: $15$ hours worked

Pay Period Ending June $28$: $20$ hours worked

Additional Tax and Withholding Information

Employee Responsibility

Federal Income Tax: $10\%$ of gross pay

State Income Tax $5\%$ of gross pay

FICA Tax $7\mathrm{.}65\%$ of gross pay

Employer Responsibility

FICA Tax $7\mathrm{.}65\%$ of gross pay

State Unemployment none $2\%$ of gross pay

Federal Unemployment $0\mathrm{.}8\%$ of gross pay