Question

Crane Company has the following data for the weekly payroll ending January 31.

		Hours
Employee		M		T		W		T		F		S		Hourly Rate		Federal Income Tax Withholding		Health Insurance
L. Helton		9		8		8		8		10		2		$12		$32		$10
R. Kenseth		7		9		7		7		7		5		14		36		27
D. Tavaras		10		11		8		8		9		0		15		57		26

Employees are paid 1.5 times the regular hourly rate for all hours worked in excess of 40 hours per week. FICA taxes are 7.65% on the first $127,200 of gross earnings. Crane Company is subject to 5.4% state unemployment taxes and 0.8% federal unemployment taxes on the first $7,000 of gross earnings.

(a)

Prepare the payroll register for the weekly payroll.

Answer 1

Ans:

		Earnings					Deductions				Net Pay
Employees	Total Hours	Regular@ Hourly rate	Overtime	Gross Pay		FICA [email protected]%	Federal IT	Health Insurance	Total
L. Helton	45	480	90	570		43.60	32	10	85.60		484.40
R. Kenseth	42	560	42	602		46.05	36	27	109.05		492.95
D. Tavaras	46	600	135	735		56.22	57	26	139.22		595.78
				1,907		145.87	125	63			1,573

For Overtime:

L. Helton: (45-40)*1.5*12= 90

R. Kenseth= (42-40)*1.5*14= 42

D. tavaras: (46-40)*1.5*15= 135

Journal Entries

Date	Account title and explanation	Debit($)	Credit($)
	Salaries Payable	1,907
	FICA Payable		145.87
	Federal Income Taxes Payable		125
	health Insurance Payable		63
	Accrued payroll Payable		1,573.13
	{ to record payroll}