Exam 8: Payroll Accounting: Employee Earnings and Deductions

Someone who performs a service for a fee and does not work under the control and direction of the company paying for the service is known as a(n)____________________.

The ____________________ requires employers to determine the amount to withhold from an employee's gross pay for a specific time period from the appropriate wage-bracket table provided by the Internal Revenue Service.

Under federal law,employers are required to withhold certain amounts from the total earnings of each employee to be applied toward the payment of the employee's federal income tax.

Journalize the entry for Hot Rod Service using the following data from the payroll register: Regul ar earnings \ 16,370 Overtime earnings 903 Federal income tax withheld 2,268 Social Security tax withheld 827 Medicare tax withheld 194 Pension contribution from employees 711 Health insurance premiums 807

Any person who agrees to perform a service for a fee and is not subject to the control of those for whom the service is performed is called a(n)

The Federal Insurance Contributions Act requires employers to withhold FICA taxes from employees' earnings.

According to the assumption used in this text,employers are required to withhold Social Security taxes on the first ____ of each employee's earnings.

A separate record of each employee's earnings is called a(n)

An employee's total earnings is referred to as gross pay.

Ian McCarthy works for Willow Tree Homes.His rate of pay is $16.00 per hour and he is paid 1 1/2 times the regular rate for all hours worked in excess of 40 per week.During the last week of March of the current year he worked 45 hours.Ian is single and claims 2 withholding allowances on his W-4 form.His weekly wages are subject to the following deductions: a. Employee (Federal)income tax (use withhol ding table provided in text). b. Social Security tax at $6.2 \%$ . c. Medicare tax at $1.45 \%$ . d. Heal th insurance premium, $\$ 60$ . e. Credit union deposit, $\$ 140$ . f. United Way contribution, $\$ 15$ . Required: 1.Compute McCarthy's regular,overtime,gross,and net pay. 2.Journalize the payment of his wages for the week ended March 26,crediting Cash for the net amount.

Employees Income Tax Payable is a liability account that is credited for the FICA tax withheld from an employee's earnings.

Vince Lupino works for Best Supplies Company,which pays its employees time and a half for all hours worked in excess of 40 hours per week.Lupino's rate of pay is $12.00 per hour paid weekly.Federal income tax withheld was $54.00.His wages are subject to Social Security tax withheld at the rate of 6.2% and Medicare tax at the rate of 1.45%.He worked 8 hours of overtime last week (week ended July 16). Required: 1. Compute the following: a. Regular pay for the week b. Overtime pay for the week c. Total gross wages d. Social Security withheld e. Medicare tax withheld f. Total withholding g. Net pay 2. Journalize the payroll entry.

____________________ provides pensions and disability benefits.

Match the terms with the definitions. - Compensation for skilled or unskilled labor.

The account that is debited for the total amount of the gross earnings of all employees for each pay period is

Match the terms with the definitions. -A separate record of each employee's earnings.

An independent contractor performs a service for a fee and works under the control and direction of the company paying for the service.

The Fair Labor Standards Act provides that all employees covered by the act must be paid one and one-half times the regular rate for all hours worked over 40 per week.

The earnings base,against which the FICA tax is applied,and the tax rate have been changed several times since the law was first enacted and can be changed by Congress at any time in the future.

Pension payments are required deductions from an employee's gross earnings.