SFCC Corporation has 8 employees. Information about the October payroll follows:

Question

SFCC Corporation has 8 employees. Information about the October payroll follows:

Question # 00138785 Posted By: jia_andy Updated on: 11/23/2015 12:55 PM Due on: 03/24/2016

Subject Accounting Topic Accounting Tutorials:

Question

Problem 1

SFCC Corporation has 8 employees. Information about the October payroll follows:

Name	Hours Worked	Pay Rate	Federal Income Tax Withheld
Breschi, K	95	$12 per hour	$200
Carballo, P	n/a	$3,000 per month	$850
Dangelo, J	180	$14 per hour	$625
Gaines, T	n/a	$4,500 per month	$1,100
Goseco, M	n/a	$10,100 per month	$3,575
Skolnick, J	180	$12 per hour	$480
Williams, R	172	$9 per hour	$140
Wong, O	195	$16 per hour	$800

Additional information is as follows:

SFCC is in a state without an income tax. Employees' federal income tax withholdings depend on various factors, and the amounts are as indicated in the above table.

No employees worked overtime, with the exception of Oscar Wong, who worked 15 hours of overtime. Overtime is paid at 150% of the normal hourly rate.

Assume that gross pay is subject to social security taxes at a 6.5% rate, on an annual base of $100,000. Assume that Medicare/Medicaid taxes are 1.5% of gross earnings. These taxes are matched by the employer. Only Marcia Goseco had earned more than $90,000 during the months leading up to October. She had earned $90,900 during that time period.

SFCC has 100% participation in a $10 per month employee charitable contribution program. These contributions are withheld from monthly pay.

SFCC pays for workers' compensation insurance at a 2% of gross pay rate. None of this cost is paid by the employee.

SFCC provides employees with a group health care plan; however, the cost is fully paid by employees. The rate is $250 per month, per employee.

SFCC's payroll is subject to federal (0.5%) and state (1.5%) unemployment taxes on each employee's gross pay, up to $8,000 per year. All employees had earned in excess of $8,000 in the months leading up to October, with the exception of Karen Breschi. Karen was first employed during the month of October.

SFCC contributes 5% of gross pay to an employee retirement program. Employees do not contribute to this plan.

(a) Complete the payroll schedule on the accompanying blank worksheet.

(b) Prepare journal entries for SFCC's payroll and the related payroll expenses.

Problem 2

Dry Dock Container Corporation began operations in early 20X5, when it issued 200,000 shares of $3 par value common stock for $10 per share. The following additional equity-related transactions occurred during 20X5.
Transaction A: Issued 50,000 shares of $100 par value, 6%, cumulative preferred at $102 per share.
Transaction B: Reacquired 10,000 common shares for treasury at $12 per share.
Transaction C: Declared the full cash dividend on the preferred and $0.10 per share on the outstanding common shares.
Transaction D: Paid the previously declared dividends.
Transaction E: Sold 10,000 treasury shares at $15 per share.
Transaction F: Declared and issued a 2% common stock dividend. The dividend occurred subsequent to the above described treasury stock transactions. The market value of the stock was $13 per share.
Transaction G: Reacquired 20,000 common shares for treasury at $11 per share.
Transaction H: Closed the annual net income of $800,000 from Income Summary to Retained Earnings.
(a)	Prepare journal entries for the above described transactions.

(b)	Prepare the 20X5 statement of stockholders' equity reflecting the above described transactions.

(c)	Prepare the stockholders' equity section of Dry Dock's balance sheet at December 31, 20X5.