Problem 8 1Time cards are being entered into the accounting

Problem 8

(1)Time cards are being entered into the accounting system for four employees. The cost for employee 1 are to be billed to job cost code 302.01.01100L Ten hours of Employee 2 time is to be billed to job cost code 302.010610L and the remaining 30 hours are to be billed to job cost code 302.01.06210L. Employee 3 took vacation this entire week and employee 4 works in the main office. The employee costs and deductions withheld fro the employees check are shown in table 3-1 using the chart of accounting in figure. 2-1. Determine the changes to the balance sheet, income statement, job cost ledger and equipment ledger as the result of entering the employees time into the accounting system.

(2) Using the chart of accounts in Figure 2-1, determine the changes to the balance sheet, income statement, job cost ledger, and equipment ledger as the result of paying the employees in question (1) for one week’s work.

Figure 2-1

Accounting Transactions 49 Table 3:-1 Employe Costs and Desductions Employee ($) 2 4 Total Employer\'s Costs Wages Social Security Medicare SUTA FUTA Liability Insurance Workers\' Comp. Health Insurance Vacation 600.00 37.20 8.70 18.00 4.80 12.00 54,00 40.00 38.92 813.62 350.00 21.70 1,850.00 114.70 26.83 24.80 31.00 12.00 3.20 8.00 36.00 40.00 29.79 559.59 10.50 2.80 7.00 31.50 40.00 27.51 496.09 15.00 4.00 10.00 15.00 4.80 37.00 136.50 160.00 129.42 2,524.75 33.20 655.45 Total Employee Deductions Social Security Medicare Federal Withholdings State Withholdings Health Insurance 114.70 31.00 7.25 44.85 30.00 60.00 173.10 21.70 37.20 8.70 59.85 36.00 60.00 201.75 24.80 5.80 29.85 24.00 60.00 144.45 26.83 156.90 111.00 240.00 649.43 22.35 60.00 130.13 Total

Solution

EMPLOYEE 1 2 4

WAGES 600 400 500 SOCIAL SECURITY 37.20 24.8 31 MEDICARE 8.70 5.8 7.25 SUTA 18 12 15 FUTA 4.8 3.2 4 LIABILITY INSURANCE 12 8 10 WORKER\'S COMP. 54 36 15 HEALTH INSURANCE 40 40 40 VACATION 38.92 29.79 33.20 TOTAL 813.62 559.59 655.45   

EMPLOYEE DEDUCTION

SOCIAL SECURITY 37.20 24.8 31 MEDICARE 8.7 5.8 7.25 FEDERAL WITHHOLDING 59.85 29.85 44.85 STATE WITHHOLDING 36 24 30 HEALTH INSURACE 60 60 60 TOTAL 201.75 144.45 173.10 NET PAYABLE TO EMPLOYEE 611.87 415.14 482.35

TOTAL COST OF EMPLOYEE 1 THAT IS $611.87 IS CHARGED TO JOB COST CODE 302.01.01100L.

25% EMPLOYEE COST OF EMPLOYEE 2 THAT IS $103.79 IS CHARGED TO JOB COST CODE 302.010610L AND THE REMAINING 75% THAT IS $ 311.35 IS CHARGED TO JOB COST CODE 302,01.06210L.

EMPLOYEE 3 WAS ON VACATION SO,NO AMOUNT IS PAYABLE TO EMPLOYEE 3.

EMPLOYEE 4 WAS WORKING IN OFFICE SO,HIS AMOUNT OF COST THAT IS $ 482.35 WILL CHARGED TO INCOME STATEMENT.