Exercise 2. During the past week, four employees of the Lovo Inc. worked
the number of hours shown in the table. All four employees receive overtime
pay at one and a half times their regular hourly rate for any hours worked
beyond 40 in a week. Calculate the regular earnings, overtime earnings, and
gross pay for each employee.
Employee Hourly
Rate
Hours
Worked
Regular
Earnings
Overtime
Earnings
Gross Pay
Ann We $18 45 $ $ $
Gregory
Box
19 44
Dan Knox 19 43
Lana
Gonzales
17 46
Total 178 $Exercise 5. The monthly wages for December, 2016 and the year-to-date
earnings as of November 30 for the three employees of the Elegant Inc. are
listed in the table below.
Requirements:
2. Calculate the amount of FICA: Social Security Tax and Medicare Tax to be
withheld from each of the employee’s gross (December only). Apply a 6.2
percent as a social security tax rate using the annual limit of the
contribution and benefit base. For earnings in 2016, this base is
$118,500. Also, apply a 1.45 percent as a Medicare tax rate.
Employee December
Salary
The year-todateearnings up
to November
Social
Security Tax
(December,
2016)
Medicare Tax
(December,
2016)
Rod Cast $2,900 $ $ $
Veronica
Ergo
10,800
Ann Lola 9,650
Exercise 6. The monthly wages for December, 2016 and the year-to-date
Exercise 8. Lola Company’s accounting year ends on December 31, 2016.
On December 1, Lola signs a note for $12,000, 90-day, and 5% interest.
Record (in General Journal) the note, the accrual of interest on December 31
and its payment on March 1 of the next year.