Share
Explore BrainMass

# Accruals and Deferrals

Question 1

Company DEF has three employees and does the payroll every Friday. Determine the gross pay, total deductions and net pay for each employee. Use the following for FICA: Cap = \$100,000, rates are 6% for social security and 1.5% for Medicare.

Steve--worked 45 hours and earns \$30/hour. His year to date earnings are \$99,300. Besides FICA he has deductions of \$250 for federal income tax, \$125 for state income tax and \$75 for union dues.

Mary---worked 45 hours and earns a salary of \$52,000 per year. Her year to date earnings are \$43,200. Besides FICA she has deductions of \$185 in federal income tax, \$100 for state income tax, and \$40 for her medical insurance premium.

Pete----worked 30 hours and earns \$20 per hour. His year to date earnings are \$24,435. besides FICA he has deductions of \$70 for federal income tax, \$42 for state income tax and \$25 for union dues.

Question 2
The following totals appear in the payroll register of Company ABC. of our employees. These are the totals of all employees.

Gross Pay..........................\$25,000

Social security...................\$1500

Medicare...........................\$375

Federal income tax............\$4500

State income tax...............\$2000

Union dues.......................\$150

Total deductions..............\$8725

Net Pay..........................\$16,275

All employee wages are subject to FUT and SUT. Our SUT rate is 5% and our FUT rate is 1%.

Prepare the journal entries to record the payroll, pay the payroll, and record the payroll taxes.

Question 3
Provide the necessary adjusting entries for December 31

1. Wages owed to our employees totaled \$2400.

2. Depreciation on our truck was \$1200.

3. Supplies used for the period was \$500

4. Insurance expired was \$1300.

5. Income tax owed but not yet paid was \$10,000.

#### Solution Summary

Accurals and deferrals are examined.

\$2.19