Principles of Cost Accounting: E3-12 A weekly payroll summary made from labor time

Principles of Cost Accounting

E3-12 Employees' earnings and taxes
A weekly payroll summary made from labor time records shows the following data for Victory Parkway Inc.:
Employee Classification Hourly Rate Regular Overtime
Holloway, T. Direct 12 40 2
Jackson, D. Direct 12 40 3
McLean, J. Direct 15 40 4
Lyons, M. Indirect 9 40
Taylor, A. Indirect 18 40
Overtime is payable at one-and-a-half times the regular rate of pay and is distributed to all jobs worked on during the period.
a. Determine the net pay of each employee. The income taxes withheld for each employee amount to 15% of the gross wages.
b. Prepare journal entries for the following:
1. Recording the payroll.
2. Paying the payroll.
3. Distributing the payroll. (Assume that the overtime premium will be charged to all jobs worked during the period).
4. The employer's payroll taxes. (Assume that none of the employees has achieved the maximum wage bases for FICA and unemployment taxes).
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