Accounting for Payroll
Bags, Inc., a manufacturer of suitcases, has 10 employees; five are paid on a salary basis, and five are hourly employees. The employees and their compensation are as follows:
|
|
Annual Salary |
|
Ken Scott (president) |
$91,500 |
|
Tatia Furgins |
57,000 |
|
Jennifer Poulins |
48,750 |
|
Robyn Meek |
23,800 |
|
Kyle Roberts |
13,900 |
|
|
Rate per Hour |
|
Richard Dean (50 hours per week) |
$1400 |
|
Denise Ray (40 hours per week) |
1150 |
|
Dale Frank (40 hours per week) |
975 |
|
Bryan Leslie (30 hours per week) |
450 |
|
Albert Lamb (20 hours per week) |
365 |
The salaried employees are covered by a comprehensive medical and dental plan. The cost of the plan is $45 per employee and is deducted from each paycheck. The hourly employees are covered only by a medical plan. The cost is calculated at 3.5% of gross pay and is deducted from each check. The FICA rate is 7.65%, and FUTA is 6.2%, with the maximum credit for state unemployment allowed. The state unemployment tax is 5.4%. No employee has reached the FICA, FUTA, or SUTA salary limits. In addition, each of the hourly employees, except Albert, belongs to the Suitcase Workers of America Union. Union dues are $5.65 per month and are deducted and paid on behalf of the hourly employees. The income tax withholding rate is 28% for employees with annual incomes above $29,500 and 15% for employees with annual incomes of $29,500 or less. Hourly employees are paid weekly on Friday, January 6, 13, 20, and 27. Salaried employees are paid twice a month, on January 13 and 27. Assume that payroll taxes and all employee withholdings and deductions are paid on the 15th and the last day of each month.
Instructions: Make all entries related to Bags, Inc.’s, payroll for January 6, January 13, and January 15.