Homework Week 2 Solutions by r5uhfBp

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									                               Oakton Community College
                             Accounting 170 – Payroll Accounting
                                      Robert Bruebach
                                   Homework - Week #2
                                         SOLUTIONS



Problem #1

Use the percentage method to compute the federal income taxes to withhold for each employee.

                                          No. of                               Amount
Employee       Employee      Marital   Withholding                  Pay         to Be
  No.           Name         Status    Allowances       Salary   Frequency     Withheld

      1       Amorosa, A.      M           4            $1,610     weekly      $157.55a

      2         Finley, R.     S           0             825      biweekly        94.60b

      3         Gluck, E.      S           5            9,630      monthly     1,657.95c

      4         Quinn, S.      M           8             925     semimonthly       0.00d

      5        Treave, Y.      M           2            1,975      monthly        66.67e


a
    $1,610.00 – 4($73.08) = $1,317.68 – $490.00 = $827.68 × 0.15 = $124.15 + $33.40 = $157.55

b
    $825.00 – 0 = $825.00 – $417.00 = $408.00 × 0.15 = $61.20 + $33.40 = $94.60

c
    $9,630.00 – 5($316.67) = $8,046.65 – $7,317.00 = $729.65 × 0.28 = $204.30 + $1,453.65 =
    $1,657.95

d
    $925.00 – 8($158.33) = $0 = $0

e
    $1,975.00 – 2($316.67) = $1,341.66 – $675.00 = $666.66 × 0.10 = $66.67




                                               Page 1
                              Oakton Community College
                          Accounting 170 – Payroll Accounting
                                   Robert Bruebach
                                Homework - Week #2
                                      SOLUTIONS


Problem #2

Use the percentage method and wage bracket method to compute the federal income taxes to
withhold for each employee.

                                                                   Amount to Be
                                                                     Withheld
                         No. of      Gross                                  Wage-
              Marital Withholding    Wage            Pay       Percentage Bracket
 Employee     Status Allowances     or Salary     Frequency     Method     Method
  Corn, A.      S         2          $ 675            weekly    $ 64.78   $ 65.00

 Fogge, P.      S         1          1,960            weekly    391.05      N/A

  Felps, S.     M         6          1,775        biweekly       58.61     58.00

Carson, W.      M         4          2,480      semimonthly     190.05    192.00

 Helm, M.       M         9          5,380      semimonthly     573.51      N/A




                                             Page 2
                                                       Oakton Community College
                                                    Accounting 170 – Payroll Accounting
                                                             Robert Bruebach
                                                          Homework - Week #2
                                                                SOLUTIONS

Problem #3

Following is a payroll register for the Royster Company located in Illinois. Employees have been paid the same amount on a
weekly basis for all year. Complete the payroll register for the pay period ending December 19th, the 51st pay period of the year.
Complete the payroll register. Use the wage bracket method, when able, when calculating federal income tax (FIT) and
calculate state income tax (SIT) using the Weekly Illinois Tax Table provided on the class website.
                                th
For Period Ending December 19
                                        No. of  No. of Illinois                                  Deductions                             (e)
                         Marital      Fed. W/H  (Line 1) W/H       Weekly           (a) FICA              (b)            (c)           Net
    Employee Name        Status      Allowances Allowances        Earnings    OASDI          HI          FIT             SIT           Pay
   Green, Tom              M              3           3           $2,210.00   $ 0.00*        $32.05     $306.09**      $ 104.59     $1,767.27
   Morris, Maive           S              1             1           400.00        16.80        5.80        35.00         18.08         324.32
   Schmidt, Beth           M              0             0           490.00        20.58        7.11        34.00         24.55         403.76
   Carr, Herman            S              2             3          1,000.00       42.00       14.50       128.00         44.09         771.41
   Wilson, Ronda           S              1             1           470.50        19.76        6.82        46.00         21.58         376.34
   Gleason, Wendy          M              3             2           880.00        36.96       12.76        60.00         40.06         730.22
          Totals                                                  $5,450.50   $136.10        $79.04      $609.09       $252.95      $4,373.32

Compute the employer’s FICA taxes for the pay period ending December 19.

OASDI Taxes                                                                      HI Taxes
OASDI taxable earnings               $3,240.50                                   HI taxable earnings   $5,450.50
OASDI taxes                          $ 200.91                                    HI taxes              $ 79.03

* Passed FICA–OASDI limit:
                    th     st
       December 19  51 pay period of the year.

       Tom Green: FICA-OASDI  No tax due. Why? $2,210 * 51 pay periods = $112,710  exceeds $110,100
       Cumulative pay prior to 51st  ($2,210 * 50 pay periods = $110,500 …so, he reached the $110,100 maximum prior to the 51st pay period)

** Must use percentage method
       Tom Green: FIT  must use percentage method to calculate FIT.


                                                                        Page 3
                               Oakton Community College
                            Accounting 170 – Payroll Accounting
                                     Robert Bruebach
                                  Homework - Week #2
                                        SOLUTIONS


Question #1

T / F   On August 3rd, Jason filed an amended Form W-4 with his employer. Jason’s employer is
        required put the new withholding allowance certificate into effect before the next weekly
        payday, which is on August 4th.

        Answer: False – the employer has 30 days to implement the new W-4. Also, the payroll for
        August 4th was probably calculated/entered prior to August 3rd, so even the best intentioned
        employer wouldn’t be able to implement the W-4 until the next payroll after August 4th.



Question #2

T / F   The employer is required to forward all Form W-4’s to the IRS on a quarterly basis.

        Answer: False – the employer retains the W-4 in the employee’s records. The IRS will notify
        the employer if they need a copy of the employee’s W-4.



Question #3

T / F   If an employer is filing ten (10) Form W-2’s, the employer must use magnetic media or
        electronic filing rather than paper Forms W-2.

        Answer: False – the employer is require to use magnetic media or electronic filing if they are
        filing in excess of 250 Form W-2’s .




                                               Page 4

								
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