Module 6 Discussion Question 2 Problems - Problem One

Question

Module 6 Discussion Question #2 Problems Problem One Parry Paint LLC started operations on January 1, 2019. It had the following payroll transactions during the year. Jan 15 – Paid an employee B. Vaughn gross pay of $2,000 for January 1-15 salary, calculated as follows: Gross Pay Deductions Income taxes 15% FICA Social Security 6.2% FICA Medicare 1.45% Total deductions Net Pay $2,000 The company matches FICA deductions. Required: a. Calculate B. Vaughn’s net pay and journalize the entries to record her payroll. b. Prepare journal entries to record the above transactions. Show necessary calculations. Problem Two An extract from the trial balance of Paragon Corporation at December 31, 2019 is reproduced below: Amount in unadjusted trial balance Amount in adjusted trial balance a. Salaries expense (J. Smith) $50,000 $52,000 b. Employee income taxes payable $0 $500 c. FICA Social Security taxes payable $0 $248 d. FICA Medicare taxes payable $0 $ 58 Additional information: Employees pay 6.2% of their gross salaries to Social Security and 1.45% of gross salaries to Medicare. The company matches employees’ Social Security and Medicare contributions 1 to 1. a. Prepare the adjusting entry that was posted to record the salary payable. b. Prepare the adjusting entry that was posted to record the company’s payroll expenses. c. Prepare the journal entries to record the payments on January 5, 2020 to employee J. Smith and the Internal Revenue Service. Problem Three Reference: SPW Industries employees several nonexempt employees. All employees are paid on a weekly basis. Please see the information below for Donnie Williams, one of the company’s nonexempt employees. Position Electrical Maintenance $30 per hour Mechanical Engineering $32.50 per hour Tax Information Married Three withholding allowances Pay period Information Monday – 15 hours – Electrical Maintenance Tuesday – 15 hours – Electrical Maintenance Wednesday – 15 hours – Electrical Maintenance Thursday – 9 hours – Electri

Dr. Jack HW Helper · Accepted Answer

To address the payroll calculations and journal entries requested in the assignment, we will systematically approach each problem outlined for Parry Paint LLC, Paragon Corporation, SPW Industries, ABC Widgets, and others, making sure to follow all steps and provide required calculations. Problem One: B. Vaughn’s Payroll Calculation For B. Vaughn, the gross pay for the period from January 1 to January 15, 2019, is $2,000. The deductions are calculated based on the following rates: Income Tax: 15% of $2,000 = $300 FICA Social Security: 6.2% of $2,000 = $124 FICA Medicare: 1.45% of $2,000 = $29 The total deductions are: Total Deductions = $300 + $124 + $29 = $453 Net Pay calculation: Net Pay = Gross Pay - Total Deductions = $2,000 - $453 = $1,547. Journal Entries: Debit Salaries Expense: $2,000 Credit Income Taxes Payable: $300 Credit FICA Social Security Payable: $124 Credit FICA Medicare Payable: $29 Credit Cash (Net Pay): $1,547 Problem Two: Salaries Expense Adjustments at Paragon Corporation Given the trial balance adjustments: Salaries Expense (increase of $2,000 from $50,000 to $52,000) Employee Income Taxes Payable: $500 FICA Social Security Taxes Payable: $248 FICA Medicare Taxes Payable: $58 Adjusting Journal Entries: Debit Salaries Expense: $2,000 Credit Salaries Payable: $2,000 Debit Income Tax Expense: $500 Credit Income Taxes Payable: $500 Debit FICA Social Security Expense: $248 Credit FICA Social Security Payable: $248 Debit FICA Medicare Expense: $58 Credit FICA Medicare Payable: $58 Problem Three: Donnie Williams' Weekly Gross Pay Donnie's payment structure indicates different hourly rates for his positions: Electrical Maintenance: $30/hour Mechanical Engineering: $32.50/hour His time distribution is: Electrical Maintenance: 15 + 15 + 15 + 9 + 54 hours = 108 hours Mechanical Engineering: 6 + 12 + 2 + 20 = 40 hours Weighted Average Rate: Total Earnings for Electrical Maintenance: 108 hours * $30 = $3,240 Total Earnings for Mechanical Engineering: 40 hou

Module 6 Discussion Question 2 Problems - Problem One ✓ Solved

Module 6 Discussion Question #2 Problems Problem One

Paper For Above Instructions

Problem One: B. Vaughn’s Payroll Calculation

Problem Two: Salaries Expense Adjustments at Paragon Corporation

Problem Three: Donnie Williams' Weekly Gross Pay

Problem Four: Luke Rucker’s Payroll Register

Problem Five: Tanya Lynn’s Payroll Calculation

Problem Six: Brad Young’s Net Pay Calculation

Problem Seven: Morgan Paisley’s Net Pay

Conclusion

References