Excel Applications for Accounting Principles 4th Edition by Gaylord Smith

Exercise 2

PROBLEM DATA
Reno Graphics has five employees, and they are paid at the end of each month. Payroll data for November are as follows:

Other information (using 2011 rates) is as follows:
a. Social security taxes are 4.2% of monthly gross pay up to a cumulative total pay of $106,800 for 2011. Employers must pay 6.2% of monthly gross pay up to a cumulative total pay of $106,800 for each employee.
b. Medicare taxes are 1.45% on monthly gross pay with no upper limit.
c. A $25 monthly deduction is made for union dues for all union members.
d. Unemployment taxes are paid on monthly gross pay up to the first $7,000 earned by each employee each year. State and federal rates are 2.7% and.8%, respectively.
REQUIREMENT
You have been asked to record the November payroll information using a payroll register and a general journal. Review the printout of the worksheet PR, a computerized payroll register, that follows these requirements. The columns will automatically retotal as new entries are made. Entries in column B indicate whether or not employees are union members. Assume Jones's cumulative gross pay at October 31 could be $85,000, or $105,000, or $125,000.