Chapter 13-2 specifically focuses on the employer’s responsibilities. While 13-1 dealt with calculating gross pay and deductions from the employee’s perspective, 13-2 forces you to look at the ledger from the company’s point of view. You are no longer asking, "How much does the employee take home?" You are asking, "How much does this employee actually cost the company?"
For many students, Chapter 13 marks a pivotal shift in their introductory accounting course. You have moved past the basics of debits and credits, past adjusting entries, and into the messy, real-world world of .
Do not try to do the math on scratch paper. Draw a grid (or use the working papers provided) with columns for: Employee Name, Hours, Regular Pay, Overtime Pay, Gross Pay, FIT, FICA-SS, FICA-Med, State Tax, Health Insurance, Total Deductions, and Net Pay. accounting chapter 13-2 application problem answers
If an employee has earned $6,500 and now earns another $1,500, only the remaining $500 ($7,000 tax base - $6,500 prior earnings) is taxable for FUTA/SUTA, even though their total earnings for the period were higher. 2. Calculate Employer Tax Liabilities
| Date | Account Title | Debit | Credit | | :--- | :--- | :--- | :--- | | Jan 12 | Payroll Tax Expense | 1,017 | | | | Social Security Tax Payable | | 620 | | | Medicare Tax Payable | | 145 | | | SUTA Payable | | 210 | | | FUTA Payable | | 42 | You have moved past the basics of debits
The problem typically requires students to analyze employee earnings records to calculate taxes based on specific wage bases. Key concepts include:
In most standard accounting textbooks (like Century 21 Application Problem 13-2 focuses on Recording Employer Payroll Taxes If an employee has earned $6,500 and now
Specifically, usually introduces the calculations required to determine Gross Pay, Net Pay, and Payroll Deductions .
To solve this problem, you must master three specific calculations. Without these, the answers will be incorrect.
Start with the employee's prior accumulated earnings (e.g., as of March 31) and add the current pay period's total earnings to find the new total. Determine Unemployment Taxable Earnings: Compare the accumulated earnings to the $7,000 threshold .