Reference no: EM13533265

Diamond Industries, Inc., began business on January 2, 2011. Salaries were paid to employees on the last day of each month, and social security tax, Medicare tax, and federal income tax were withheld in the required amounts. An employee who is hired in the middle of the month receives half the monthly salary for that month. All required payroll tax reports were filed, and the correct amount of payroll taxes was remitted by the company for the calendar year. Early in 2012, before the Wage and Tax Statements (Form W-2) could be prepared for distribution to employees and for filing with the Social Security Administration, the employees' earnings records were inadvertently destroyed.

None of the employees resigned or were discharged during the year, and there were no changes in salary rates. The social security tax was withheld at the rate of 6.0% and Medicare tax at the rate of 1.5% on salary. Data on dates of employment, salary rates, and employees' income taxes withheld, which are summarized as follows, were obtained from personnel records and payroll records:

Employee	Date First Employed	Monthly Salary	Monthly Income Tax Withheld
Beltran	Jan. 1	$ 4,300	$ 681
Jeter	Apr. 16	11,000	2,508
Lee	Aug. 1	7,800	1,612
Rodriguez	Nov. 16	3,000	356
Santana	Mar. 1	6,120	1,145
Ramirez	May 16	3,840	566
Ordonez	Dec. 1	4,000	606

Instructions

1. Calculate the amounts to be reported on each employes Wage and Tax Statement (Form W-2) for 2011, arranging the data in the following form:

	Gross	Federal Income	Social Security	Medicare
Employee	Earnings	Tax Withheld	Tax Withheld	Tax Withheld

2. Calculate the following employer payroll taxes for the year: (a) social security; (b) Medicare; (c) state unemployment compensation at 4.4% on the first $9,000 of each employee's earnings; (d) federal unemployment compensation at 0.8% on the first $9,000 of each employee's earnings; (e) total.