1 Federal Income Tax Withholding Bob Dunns weekly gross earn

1. Federal Income Tax Withholding

Bob Dunn\'s weekly gross earnings for the present week were $2,310. Dunn has three exemptions. Using the wage bracket withholding table in Exhibit 2 with a $75 standard withholding allowance for each exemption, what is Dunn\'s federal income tax withholding? Round your answer to two decimal places.

$

2. Employee Net Pay

Steven Friedman\'s weekly gross earnings for the week ended April 22 were $1,906, and his federal income tax withholding was $343.08. Assuming the social security rate is 6% and Medicare is 1.5%, what is Steven\'s net pay?

Note: If required, round your answer to two decimal places.
$

3. Journalize Period Payroll

The payroll register of Chen Engineering Co. indicates $1,200 of social security withheld and $300 of Medicare tax withheld on total salaries of $20,000 for the period. Federal withholding for the period totaled $3,400.

Provide the journal entry for the period\'s payroll. If an amount box does not require an entry, leave it blank.

4. Journalize Payroll Tax

The payroll register of Chen Engineering Co. indicates $2,580 of social security withheld and $645.00 of Medicare tax withheld on total salaries of $43,000 for the period. Earnings of $12,900 are subject to state and federal unemployment compensation taxes at the federal rate of 0.6% and the state rate of 5.4%.

Provide the journal entry to record the payroll tax expense for the period. If an amount box does not require an entry, leave it blank. Round to two decimal places.

5. Estimated Warranty Liability

Cook-Rite Co. sold $164,000 of equipment during January under a two-year warranty. The cost to repair defects under the warranty is estimated at 7% of the sales price. On August 15, a customer required a $304 part replacement, plus $99 of labor under the warranty.

Required:

(a) Provide the journal entry for the estimated warranty expense on January 31 for January sales.

(b) Provide the journal entry for the August 15 warranty work. If an amount box does not require an entry, leave it blank.

6. Quick Ratio

Nabors Company reported the following current assets and liabilities for December 31 for two recent years:

Required:

a. Compute the quick ratio on December 31 of both years. If required, round your answers to one decimal place.

b. Is the quick ratio improving or declining?

Solution

according to policy first four question will be answered

Answer: 1

Total wage payment 2310

Total allowance (75*3) 225

Amount subject to withholding 2085

Initial withholding = 302.95

+ additional withholding : 28% withholding in excess of 1533 = (28%*(2085-1533)) = 154.56

Federal income tax withholding =457.51

Answer: 2

Gross earnings = 1906

Less: Federal income tax withholding = 343.08

Less: Social security (1906*6%) = 114.36

Less: medicare (1906*1.5%) = 28.59

Net pay = 1419.97

Answer: 3

Salaries expense Dr. 20000

Social security tax payable Cr. 1200

Medicare tax payable Cr. 300

Federal withholding tax payable Cr. 3400

Salaries payable Cr. 15100

Answer: 4

Payroll tax expense Dr. 1669

Social security tax payable Cr. 2580

Medicare tax payable Cr. 645

State unemployment tax payable Cr. (12900*5.4%) 696.60

Federal unemployment tax payable Cr. (12900*0.6%) 77.40