Oakton Community College
Accounting 170 – Payroll Accounting
Robert Bruebach
Homework - Week #2
SOLUTIONS
Problem #1
Use the percentage method to compute the federal income taxes to withhold for each employee.
Employee
No.
Employee
Name
Marital
Status
No. of
Withholding
Allowances
Salary
Pay
Frequency
Amount
to Be
Withheld
1
Amorosa, A.
M
4
$1,610
weekly
2
Finley, R.
S
0
825
biweekly
92.80b
3
Gluck, E.
S
5
9,630
monthly
1,598.38c
4
Quinn, S.
M
8
925
semimonthly
0.00d
5
Treave, Y.
M
2
1,975
monthly
59.14e
$152.86a
a
$1,610.00 – 4($76.90) = $1,302.40 – $520.00 = $782.40 × 0.15 = $117.36 + $35.50 = $152.86
b
$825.00 – 0 = $825.00 – $443.00 = $382.00 × 0.15 = $57.30 + $35.50 = $92.80
c
$9,630.00 – 5($333.30) = $7,963.50 – $7,754.00 = $209.50 × 0.28 = $58.66 + $1,540.00 =
$1,598.66
d
$925.00 – 8($166.70) = $0 = $0
e
$1,975.00 – 2($333.30) = $1,308.40 – $717.00 = $591.40 × 0.10 = $59.14
Page 1
Oakton Community College
Accounting 170 – Payroll Accounting
Robert Bruebach
Homework - Week #2
SOLUTIONS
Problem #2
Use the percentage method and wage bracket method to compute the federal income taxes to
withhold for each employee.
Employee
No. of
Marital Withholding
Status Allowances
Gross
Wage
or Salary
Pay
Frequency
Amount to Be
Withheld
WagePercentage Bracket
Method
Method
Corn, A.
S
2
$ 675
weekly
$ 62.68
$ 63.00
Fogge, P.
S
1
1,960
weekly
381.70
N/A
Felps, S.
M
6
1,775
biweekly
52.12
52.00
Carson, W.
M
4
2,480
semimonthly
179.83
181.00
Helm, M.
M
9
5,380
semimonthly
529.88
N/A
Page 2
Oakton Community College
Accounting 170 – Payroll Accounting
Robert Bruebach
Homework - Week #2
SOLUTIONS
Problem #3
Following is a payroll register for the Royster Company located in Illinois. Employees have been paid the same amount on a
weekly basis for all year. Complete the payroll register for the pay period ending December 18th, the 51st pay period of the year.
Complete the payroll register. Use the wage bracket method, when able, when calculating federal income tax (FIT) and
calculate state income tax (SIT) using the Weekly Illinois Tax Table provided on the class website.
For Period Ending December 19th
Employee Name
Green, Tom
Marital
Status
M
No. of
No. of Illinois
Fed. W/H
(Line 1) W/H
Allowances Allowances
3
3
Weekly
Earnings
$2,375.00
Deductions
(a) FICA
(b)
OASDI
HI
FIT
$ 0.00*
$34.44
$332.98**
(c)
SIT
$ 84.41
(e)
Net
Pay
$1,923.17
Morris, Maive
S
1
1
400.00
24.80
5.80
34.00
13.49
$321.91
Schmidt, Beth
M
0
0
490.00
30.38
7.11
33.00
18.41
$401.10
Carr, Herman
S
2
3
1,000.00
62.00
14.50
121.00
32.85
$769.65
Wilson, Ronda
S
1
1
470.50
29.17
6.82
44.00
16.11
$374.40
Gleason, Wendy
M
3
2
880.00
54.56
12.76
56.00
29.90
$726.78
$5,615.50
$200.91
$81.43
$620.98
$195.17
$4,517.01
Totals
Compute the employer’s FICA taxes for the pay period ending December 19.
OASDI Taxes
OASDI taxable earnings
OASDI taxes
HI Taxes
HI taxable earnings
HI taxes
$3,240.50
$ 200.91
$5,615.50
$ 81.43
* Passed FICA–OASDI limit:
December 19th  51st pay period of the year.
Tom Green: FICA-OASDI  No tax due. Why? $2,375 * 51 pay periods = $121,125  exceeds $118,500
Cumulative pay prior to 51st  $2,375 * 50 pay periods = $118,750 …so, he reached the $118,500 maximum prior to the 51st pay period)
** Must use percentage method
Tom Green: FIT  must use percentage method to calculate  $2,375 – (3 x $76.90) = $2,144.30 - 1,606 = $538.30 x 25% = $134.58 + $198.40
= $332.98
Page 3
Oakton Community College
Accounting 170 – Payroll Accounting
Robert Bruebach
Homework - Week #2
SOLUTIONS
Question #1
T / F
On August 3rd, Jason filed an amended Form W-4 with his employer. Jason’s employer is
required put the new withholding allowance certificate into effect before the next weekly
payday, which is on August 4th.
Answer: False – the employer has 30 days to implement the new W-4. Also, the payroll for
August 4th was probably calculated/entered prior to August 3rd, so even the best intentioned
employer wouldn’t be able to implement the W-4 until the next payroll after August 4th.
Question #2
T / F
The employer is required to forward all Form W-4’s to the IRS on a quarterly basis.
Answer: False – the employer retains the W-4 in the employee’s records. The IRS will notify
the employer if they need a copy of the employee’s W-4.
Question #3
T / F
If an employer is filing ten (10) Form W-2’s, the employer must use magnetic media or
electronic filing rather than paper Forms W-2.
Answer: False – the employer is require to use magnetic media or electronic filing if they are
filing in excess of 250 Form W-2’s .
Page 4