Accouting – Payroll questions

(1)  In November, gross earnings at the Humpty Dumpty Riding Company were $100,000.  All earnings are subject to 7.65% FICA taxes.  Federal income tax withheld was $20,000, and State income tax withheld was $1,600.  (1) Calculate net pay for November and, (2) record the payroll.

(2)  In March, the payroll supervisor determines that gross earnings for Horseless Carriage Rides are $120,000.  All earnings are subject to 7.65% FICA taxes, 5.4% state unemployment taxes and, .8% Federal unemployment taxes.  Journalize the employers payroll taxes.

(3)  The employee payroll records indicate the following total earnings for 2 employees through the pay period ending December 10. 

Jim Smith $93,500  Lonnie Marshall $108,100

For the pay period ending December 31, 2015, each employees’ gross earnings are $4,500.  The FICA tax rate is 7.65% on earnings up to $110,100.  In other words, any income above $110,100 is not subject to FICA tax.  Though we are not concerned with Medicare in this problem, Medicare is 1.45% of earnings with no limit.

Calculate the FICA withholdings that should be made for each employee for December 31.