Problem: Universal Operations pays its employees monthly. Payments made by the company on November 30, 2019, follow. Cumulative amounts paid to the persons named prior to November 30 are also given.
Tony Orlando, president, gross monthly salary of $17,000; gross earnings prior to November 30, $170,000.
Chris Stamos, vice president, gross monthly salary of $12,000; gross earnings paid prior to November 30, $120,000.
Caley Marie, independent media buyer who purchases media contracts for companies and performs other public relations consulting services, $15,650; gross amounts paid prior to November 30, $52,850.
Claire Hayakawa, treasurer, gross monthly salary of $6,400; gross earnings prior to November 30, $57,600.
Payment to the Canal Marketing Group for monthly services of Anna Canal, a marketing and public relations expert, $15,500; amount paid to the Canal Marketing Group prior to November 30, $46,500.
Assignment Instructions:
Use an earnings ceiling of $122,700 and a tax rate of 6.2 percent for social security taxes and a tax rate of 1.45 percent on all earnings for Medicare taxes. Schedule showing the following information:
Each employee's cumulative earnings prior to November 30.
Each employee's gross earnings for November.
The amounts to be withheld for each payroll tax from each employee's earnings; the employee's income tax withholdings are Tony Orlando, $4,760; Chris Stamos, $3,000; Claire Hayakawa, $1,200.
The net amount due each employee.
The total gross earnings, the total of each payroll tax deduction, and the total net amount payable to employees.
Give the general journal entry to record the company's payroll on November 30. Use journal page 24. Omit explanations.
Give the general journal entry to record payments to employees on November 30.
Analyze: In what month in 2019 did Chris Stamos reach the withholding limit for social security?
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