Please solve these 4 qurstions. Please answer these very accurately ASAP, then I
ID: 2373674 • Letter: P
Question
Please solve these 4 qurstions. Please answer these very accurately ASAP, then I'll give you high points(3000 pt).
The company sold merchandise with a $2,102 cost for $2,940 on credit to Wildcat Services, invoice dated March 25.
Assume that Lyn Addie is an unmarried employee. Her $1,160 of wages are subject to no deductions other than FICA Social Security taxes, FICA Medicare taxes, and federal income taxes. Her federal income taxes for this pay period total $116. Compute her net pay for the eight days%u2019 work paid on February 26. FICA tax rates applicable are: 6.2% for Social security and 1.45% Medicare. (Round your intermediate calculations and final answer to 2 decimal places. Omit the "$" sign in your response.)
Record the journal entry to reflect the payroll payment to Lyn Addie as computed in part 1. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)
3 Record the journal entry to reflect the (employer) payroll tax expenses for the February 26 payroll payment. Assume Lyn Addie has not met earnings limits for FUTA and SUTA%u2014the FUTA rate is 0.8% and the SUTA rate is 4% for Business Solutions. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)
Record the entry(ies) for the merchandise sold on March 25 if a 4% sales tax rate applies. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)
Feb. 26 The company paid cash to Lyn Addie for eight days%u2019 work at $145 per day. Mar. 25The company sold merchandise with a $2,102 cost for $2,940 on credit to Wildcat Services, invoice dated March 25.
Explanation / Answer
Payroll is often one of the biggest expenses of a business. Payroll can be complex, with deductions, tax expenses and benefits. Payroll work is detailed and visible to all employees in a firm. Many businesses outsource this function to payroll processing firms, such as ADP or Paychex--but even then, a business still needs to record all entries related to payroll, including journal entries involving accounts payable. Taxes Accounts payable related to payroll involve taxes, such as Social Security, medicare and tax withholdings. Some of the taxes are actually business expenses, while others are basically pass-through transactions to the government. For example, Social Security and Medicare are paid 50 percent by employer and 50 percent by employee. Fifty percent of taxes on a tax payable account is a business expense and the 50 percent is not. Health And Other Benefits Accounting for payroll benefits is challenging because a portion of benefits costs is responsibility of the employee, but the employer pays for entire premiums. The accounts payable for benefits reflects full premiums; however, the expense side is accounted for as full premiums less what is paid by employees. Usually the account payable is charged when a bill is received from benefits providers, once a month. Payments When payment goes out for taxes and benefits, the journal entry is to credit cash and to debit accounts payable, zeroing them out. The point is to zero out all accounts payable once payments are made on taxes and benefits. Payments on taxes are done directly to the governments along with reports so that whihholdings and other tax issues are associated with proper employer and employee. Payments on benefits are done usually every month by a check or wire to the broker or insurance firms. They are often complicated with people coming in or out of plans, new employees and other adjustments. Warning Payroll is ruled by local, state and federal laws. Taxes and benefits need to be paid properly or employees may bear the brunt of noncompliance, such as problems with their own taxes at year-end and loss of health insurance coverage. If an employer messes up payroll, most likely it will pay fees and penalties to government entities. Considerations Make sure your payroll service or whoever is processing payroll is up-to-date with all laws and reporting. Sometimes payroll services may get confused and not take out disability insurance or other taxes from your payroll. Review all report related to your payables and liabilities to make sure they are correct. After all is said and done, you are responsible for your payroll, not your contractor, or employee. ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Journal Entries for Merchandise Transactions Journal Entries for Merchandise Transactions 1. March 1, 2011 Purchased 200 units of merchandise at $10 per unit in cash. debit credit Merchandise 2,000 Cash 2,000 2. March 5, 2011 Purchased 500 units of merchandise at $10 per unit on credit. debit credit Merchandise 5,000 Accounts payable 5,000 3. March 10, 2011 Sold 300 units of merchandise at $15 per unit on credit. Journal entry to record sales revenue. debit credit Accounts receivable 4,500 Sales 4,500 Journal entry to record cost of goods sold. debit credit Cost of goods sold 3,000 Merchandise 3,000 4. Merchandise in inventory 700 units purchased - 300 units sold = 400 units in inventory 400 units x $10 per unit = $4,000 5. Gross profit = Sales - Cost of goods sold = $4,500 - $3,000 = $1,500