Question

The following summary data for the payroll period ended December 27, 2015, are available for Cayman Coating Co.:     

Gross pay	$	95,000
FICA tax withholdings		?
Income tax withholdings		14,710
Group hospitalization insurance		1,930
Employee contributions to pension plan		?
Total deductions		27,177
Net pay		?

Additional information:

• For employees, FICA tax rates for 2015 were 7.65% on the first $118,500 of each employee’s annual earnings. However, no employees had accumulated earnings for the year in excess of the $118,500 limit.
• For employers, FICA tax rates for 2015 were also 7.65% on the first $118,500 of each employee’s annual earnings.
• The federal and state unemployment compensation tax rates are 0.6% and 5.4%, respectively. These rates are levied against the employer for the first $7,000 of each employee’s annual earnings. Only $15,300 of the gross pay amount for the December 27, 2015, pay period was owed to employees who were still under the annual limit.

a-1. Assuming that Cayman Coating Co.'s payroll for the last week of the year is to be paid on January 3, 2016, use the horizontal model to record the effects of the December 27, 2015, entries for Accrued payroll.

Answer 1