Problem One

(Course Outcome I, V / Learning Outcome VI, VII)

Parry Paint LLC started operations on January 1, 2019. It had the following payroll transactions during the year.

Jan 15 - Paid an employee B. Vaughn gross pay of $2,000 for January 1-15 salary, calculated as follows:

Gross Pay

Deductions

Income taxes

15%

FICA Social Security

6.2%

FICA Medicare

1.45%

Total deductions

Net Pay

$2,000

The company matches FICA deductions.

Required:

a.Calculate B. Vaughn's net pay and journalize the entries to record her payroll.

b.Prepare journal entries to record the above transactions. Show necessary calculations.

Problem Two

(Course Outcome I, V / Learning Outcome VI, VII)

An extract from the trial balance of Paragon Corporation at December 31, 2019 is reproduced below:

Amount in unadjusted trial balance

Amount in adjusted trial balance

a.

Salaries expense (J. Smith)

$50,000

$52,000

b.

Employee income taxes payable

$0

$500

c.

FICA Social Security taxes payable

$0

$248

d.

FICA Medicare taxes payable

$0

$58

Additional information: Employees pay 6.2% of their gross salaries to Social Security and 1.45% of gross salaries to Medicare. The company matches employees' Social Security and Medicare contributions 1 to 1.

a.Prepare the adjusting entry that was posted to record the salary payable.

b.Prepare the adjusting entry that was posted to record the company's payroll expenses.

c.Prepare the journal entries to record the payments on January 5, 2020 to employee J. Smith and the Internal Revenue Service.

Problem Three

(Course Outcome I, V / Learning Outcome VI, VII)

Reference: https://www.dol.gov/whd/regs/compliance/whdfs54.htm

SPW Industries employees several nonexempt employees. All employees are paid on a weekly basis. Please see the information below for Donnie Williams, one of the company's nonexempt employees.

Position

Electrical Maintenance $30 per hour

Mechanical Engineering $32.50 per hour

Tax Information

Married

Three withholding allowances

Pay period Information

Monday - 15 hours - Electrical Maintenance

Tuesday - 15 hours - Electrical Maintenance

Wednesday - 15 hours - Electrical Maintenance

Thursday - 9 hours - Electrical Maintenance

Thursday - 6 hours - Mechanical Engineering

Friday - 12 hours - Mechanical Engineering

Saturday - 2 hours - Mechanical Engineering

Friday

54 hours - Electrical Maintenance

20 hours - Mechanical Engineering

Required

Using the weighted average method (Regulations 29 CFR 778.419), calculate the weekly gross pay for Donnie Williams. Round all calculations to two decimal places.

Problem Four

(Course Outcome I, V / Learning Outcome VI, VII)

Luke Rucker is married with two withholdings and an hourly employee at ABC Widgets. The company pays its employees on a biweekly basis. Luke earns $20 per hour. For the July 31, 20XX pay, Luke worked 92 hours.

Required:

Assuming a 40-hour week, complete Luke's payroll register below. Round all answers to two decimal places. Complete the payroll register with the period's information assuming 40-hour week.

Employee Name

Company

Marital Status

# of Withholdings

Hourly Pay Rate

Overtime Pay Rate

# of Reg Hours

# of OT Hrs

Reg Earn

OT Earn

Gross Earnings

Problem Five

(Course Outcome I, V / Learning Outcome VI, VII)

Tanya Lynn is married with four withholdings and earns a base salary of $75,000. On all sales, she earns 4 percent commission. The company pays its employees on a biweekly basis. Tanya made $175,000 in sales for the June 30, 20XX pay.

Required:

Complete the payroll register for the pay period. Round calculations 2 decimal places.

Employee Name

Company

Marital Status

# of Withholdings

Salary

Sales

Reg Earn

Commission Earn

Gross Earnings

Problem Six

(Course Outcome I, V / Learning Outcome VI, VII)

Brad Young is married with one withholding, earns $3,600 per month. Brad's employer pays him on a semimonthly basis. He has two pre-tax deductions: qualified health insurance deductions of $100 per pay and a 5% 401(k) contribution. Brad will pay $157 in federal taxes. What is Brad's Net pay? Round calculations to 2 decimal places.

Problem Seven

(Course Outcome I, V / Learning Outcome VI, VII)

Morgan Paisley is single and works part-time in a Nashville, Tennessee Hotel as a nonexempt as a housekeeper. Morgan gets paid $14.50 per hour and is paid on a biweekly basis. During the pay period, he worked 52 regular hours, with 12 of those considered overtime hours. He has one withholding and no pretax deductions. Morgan will pay $58.00 in federal taxes. What is his net pay? Round calculations to 2 decimal places.