Carson Company is a small manufacturing firm located in Altamont, Utah. The company has a workforce of both hourly and salaried employees. Each employee is paid for hours actually worked during each week, with the time worked being recorded in quarter-hour increments. Wages are paid every Friday for the week preceding. The payday for Carson Company for the work week ending Friday, December 31, 2021, is January 7, 2022. The information below will be used in preparing the payroll for the pay period ending December 31, 2021:
|Time Card No.||Employee Name||Hourly Wage or Salary||Per||Time Report for the week ended Dec. 31, 2021|
|Kettleson, Ron||17.50||Per hour||8||8||8||8||8||40|
|Little, Maxine||17.25||Per hour||8||8||8||8||8||8||48|
|Utah, Harley||18.10||Per hour||8||5 1/2||8||8||8||37 1/2|
|Riffle, John||17.90||Per hour||10||10||8||8||10||46|
|Jones, Lucy||19.75||Per hour||8||8||8||8||8||40|
|Short, Martin||3,350||Per month||8||8||8||8||8||40|
|Haney, Albert||2,510||Per month||4||8||8||8||8||8||44|
|Carson, Francis||52,000||Per year||8||8||8||8||8||40|
- Complete the Regular Earnings columns (Rate per Hour and Amount) and the Overtime Earnings columns (Rate per Hour and Amount) for each hourly employee.
- Record the Total Earnings for each employee by adding the Regular Earnings and the Overtime Earnings.
- In the Taxable Earnings columns, record the amount of each employee’s weekly earnings that is subject to FICA taxes. FICA is composed of Social Security’s Old-Age, Survivors, and Disability Insurance (OASDI) at 6.2% and Health Insurance (HI) at 1.45%. Assume the cap for OASDI in 2021 was $137,700 and there is no earnings limit for HI.
- Record the state income taxes on the gross weekly earnings for each employee. Assume the tax rate for Utah is 4.95% and withholding is at that rate.
- Calculate FUTA at the statutory rate of 0.6% on the first $7,000 of earnings and calculate SUTA at 3.689% of the first $36,600 of earnings.
- Create the journal entries for wages payable and payroll taxes payable.
- Assume the wages are paid on January 8, 2022. Record the journal entry for that transaction.