Assessment 7c – Practical Problem 5-14a

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Lesson 7

Assessment 7C – Practical Problem 5-14A

Marlene Grady and Pauline Monroe are partners engaged in operating The G&M Doll Shop, which has employed the following people since the beginning of the year.

V. Hoffman (general office worker)……………………………………………………….$1,700 per month

A. Drugan (salesperson)……………………………………………………………………….$15,000 per year

G. Beiter (stock clerk)……………………………………………………………………………. $180 per week

S. Egan (delivery person)……………………………………………………………………… $220 per week

B. Lin (cleaning and maintenance, part-time)……………………………………….$160 per week

Grady and Monroe are each paid a weekly salary allowance of $950. The doll shop is located in a state that requires unemployment compensation contributions of employers of one or more individuals. The company is subject to state contributions at a rate of 3.1% for wages not in excess of $8,100. Compute each of the following amounts based upon the 41st weekly payroll period for the week ending October 19, 2010:

a. Amount of FICA taxes (OASDI and HI) to be withheld from the earnings of each person. (Refer to Chapter 3.)

OASDI HI

M. Grady………………………………………………..$_____0.00_______$_____0.00_____

P. Monroe………………………………………………$ ____ 0.00_______ $_____0.00_____

V. Hoffman…………………………………….……… $____24.32_______ $ _____5.69_____

A. Dugan……………………………………..………… $____17.88_______ $_____4.18______

G. Beiter……………………………………..………… $_____11.16______ $ _____2.61______

S. Egan……………………………………..…………… $_____13.64______ $_____3.19______

B. Lin…………………………………...………………… $______9.92______ $_____2.32______

b. Amount of the employer’s FICA taxes for the weekly payroll? OASDI $76.92 HI $17.99 Total FICA = $94.91

c. Amount of state unemployment contributions for the weekly payroll? $10.54

d. Amount of the net FUTA tax on the payroll? $1.28

e. Total amount of...
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