Drug Store

John’s Drug Store has four employees who are paid on an hourly basis plus time-and-a-half for all hours worked in excess of 40 hours a week. Payroll data for the week ended February 15, 2010, are presented below:

Employees: Hours Worked: Hourly Rate: Fed Inc Tax Withholdings: United Fund:  The following tax rates are applicable:

FICA 8.00%

J. Uddin 39  $12.00  $34.00 $0.00    State Income Tax 3.00%

B. Conway 42  11.00 20.00 10.00   State Unemployment Taxes 5.40%

S. Becker 44  10.00 51.00 5.00   Federal Unemployment Taxes 0.80%

L. Blum 46  10.00 36.00 5.00

J. Uddin and B. Conway are married. They claim 2 and 4 withholding allowances, respectively.

The first three employees are sales clerks (store wages expense). The fourth employee performs administrative duties (office wages expense).

Instructions:

(a) Prepare a payroll register for the weekly payroll. (Use the wage-bracket withholding table found in the text for federal income tax withholdings.)

(b) Journalize the payroll on February 15, 2010, and the accrual of employer payroll taxes.