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	Nov. 16	$5,500		$944
Cruz	Jan. 2	4,800		833
Edwards	Oct. 1	8,000		1,592
Harvin	Dec. 1	6,000		1,070
Nicks	Feb. 1	10,000		2,350
Shiancoe	Mar. 1	11,600		2,600
Ward	Nov. 16	5,220		876

Required:

1. Calculate the amounts to be reported on each employee's Wage and Tax Statement (Form W-2) for 20Y8. Enter amounts to the nearest cent if required. Enter all amounts as positive numbers.

Employee	Gross Earnings		Federal Income Tax Withheld		Social Security Tax Withheld		Medicare Tax Withheld
Arnett	$		$		$		$
Cruz
Edwards
Harvin
Nicks
Shiancoe
Ward
					$		$

2. Calculate 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.

(a)
(b)
(c)
(d)
(e)

Answer 1

employee	gross earnings		federal income tax withheld		social security tax withheld		medicare tax with held
Arnet	$ 8250		$ 1416		$ 495		$ 123.75
Cruz	57600		9996		3456		864
Edward	24000		4776		1440		360
Harvin	6000		1070		360		90
Nicks	110000		25850		6600		1650
Shiancoe	116000		26000		6960		1740
ward	7830		1314		469.8		117.45

employee	gross earning	federal tax withheld	social security tax withheld		medicaretax withheld
ARNET	8250	1416	445.5	49.5
CRUZ	57600	9996	3396	60
EDWARD	24000	4776	1380	60
HARVIN	6000	1070	324	36
NICKS	110000	25850	6540	60
SHIANCOE	116000	26000	6900	60
WARD	7830	1314	422.82	46.98