1. Federal Income Tax Withholding
Bob Dunn's weekly gross earnings for the present week were $2,310. Dunn has three exemptions. Using the wage bracket withholding table in Exhibit 2 with a $75 standard withholding allowance for each exemption, what is Dunn's federal income tax withholding? Round your answer to two decimal places.
2. Employee Net Pay
Steven Friedman's weekly gross earnings for the week ended April 22 were $1,906, and his federal income tax withholding was $343.08. Assuming the social security rate is 6% and Medicare is 1.5%, what is Steven's net pay?
Note: If required, round your answer to two decimal
3. Journalize Period Payroll
The payroll register of Chen Engineering Co. indicates $1,200 of social security withheld and $300 of Medicare tax withheld on total salaries of $20,000 for the period. Federal withholding for the period totaled $3,400.
Provide the journal entry for the period's payroll. If an amount box does not require an entry, leave it blank.
4. Journalize Payroll Tax
The payroll register of Chen Engineering Co. indicates $2,580 of social security withheld and $645.00 of Medicare tax withheld on total salaries of $43,000 for the period. Earnings of $12,900 are subject to state and federal unemployment compensation taxes at the federal rate of 0.6% and the state rate of 5.4%.
Provide the journal entry to record the payroll tax expense for the period. If an amount box does not require an entry, leave it blank. Round to two decimal places.
5. Estimated Warranty Liability
Cook-Rite Co. sold $164,000 of equipment during January under a two-year warranty. The cost to repair defects under the warranty is estimated at 7% of the sales price. On August 15, a customer required a $304 part replacement, plus $99 of labor under the warranty.
(a) Provide the journal entry for the estimated warranty expense on January 31 for January sales.
(b) Provide the journal entry for the August 15 warranty work. If an amount box does not require an entry, leave it blank.
6. Quick Ratio
Nabors Company reported the following current assets and liabilities for December 31 for two recent years:
|Dec. 31, Current Year||Dec. 31, Previous Year|
a. Compute the quick ratio on December 31 of both years. If required, round your answers to one decimal place.
|December 31, current year|
|December 31, previous year|
b. Is the quick ratio improving or
according to policy first four question will be answered
Total wage payment 2310
Total allowance (75*3) 225
Amount subject to withholding 2085
Initial withholding = 302.95
+ additional withholding : 28% withholding in excess of 1533 = (28%*(2085-1533)) = 154.56
Federal income tax withholding =457.51
Gross earnings = 1906
Less: Federal income tax withholding = 343.08
Less: Social security (1906*6%) = 114.36
Less: medicare (1906*1.5%) = 28.59
Net pay = 1419.97
Salaries expense Dr. 20000
Social security tax payable Cr. 1200
Medicare tax payable Cr. 300
Federal withholding tax payable Cr. 3400
Salaries payable Cr. 15100
Payroll tax expense Dr. 1669
Social security tax payable Cr. 2580
Medicare tax payable Cr. 645
State unemployment tax payable Cr. (12900*5.4%) 696.60
Federal unemployment tax payable Cr. (12900*0.6%) 77.40
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