Question

Wage and Tax Statement Data on Employer FICA Tax

Ehrlich Co. began business on January 2, 20Y8. Salaries were paid to employees on the last day of each month, and social security tax, Medicare tax, and federal income tax were withheld in the required amounts. An employee who is hired in the middle of the month receives half the monthly salary for that month. All required payroll tax reports were filed, and the correct amount of payroll taxes was remitted by the company for the calendar year. Early in 20Y9, before the Wage and Tax Statements (Form W-2) could be prepared for distribution to employees and for filing with the Social Security Administration, the employees' earnings records were inadvertently destroyed.

None of the employees resigned or were discharged during the year, and there were no changes in salary rates. The social security tax was withheld at the rate of 6.0% and Medicare tax at the rate of 1.5%. Data on dates of employment, salary rates, and employees’ income taxes withheld, which are summarized as follows, were obtained from personnel records and payroll records:

Employee	Date First Employed	Monthly Salary		Monthly Income Tax Withheld
Arnett	Jan. 2	$3,500		$490
Cruz	Oct. 1	5,700		1,026
Edwards	Apr. 16	2,500		313
Harvin	Nov. 1	2,500		313
Nicks	Jan. 16	5,650		1,271
Shiancoe	Dec. 1	3,900		605
Ward	Feb. 1	6,700		1,441

Required:

1. Determine the amounts to be reported on each employee's Wage and Tax Statement (Form W-2) for 20Y8. Round amounts to the nearest whole dollar and enter all amounts as positive values.

Employee	Gross Earnings		Federal Income Tax Withheld		Social Security Tax Withheld		Medicare Tax Withheld
Arnett	$fill in the blank 1		$fill in the blank 2		$fill in the blank 3		$fill in the blank 4
Cruz	fill in the blank 5		fill in the blank 6		fill in the blank 7		fill in the blank 8
Edwards	fill in the blank 9		fill in the blank 10		fill in the blank 11		fill in the blank 12
Harvin	fill in the blank 13		fill in the blank 14		fill in the blank 15		fill in the blank 16
Nicks	fill in the blank 17		fill in the blank 18		fill in the blank 19		fill in the blank 20
Shiancoe	fill in the blank 21		fill in the blank 22		fill in the blank 23		fill in the blank 24
Ward	fill in the blank 25		fill in the blank 26		fill in the blank 27		fill in the blank 28
					$fill in the blank 29		$fill in the blank 30

2. Compute the following employer payroll taxes for the year: (a) social security; (b) Medicare; (c) state unemployment compensation at 5.4% on the first $10,000 of each employee’s earnings; (d) federal unemployment compensation at 0.6% on the first $10,000 of each employee’s earnings; (e) total. Round amounts to the nearest whole dollar and enter all amounts as positive values.

(a)	$fill in the blank 31
(b)	fill in the blank 32
(c)	fill in the blank 33
(d)	fill in the blank 34
(e)	$fill in the blank 35

Answer 1

1.

2.