Question

Lee Financial Services pays employees monthly. Payroll information is listed below for January 2018, the first month of Lee's fiscal year. Assume that none of the employees exceeded any relevant wage base. Salaries Federal income taxes to be withheld Federal unemployment tax rate State unemployment tax rate (after PUTA deduction) Social security tax rate Medicare tax rate $550.000 110,000 0.608 5.400 6.200 1.450 Required: Calculate the income and payroll taxes for the January 2018 pay period. Prepare the appropriate journal entries to record salaries and wages expense (not paid) and payroll tax expense for the January 2018 pay period. Complete this question by entering your answers in the tabs below. Payroll Tax General Journal Calculate the income and payroll taxes for the January 2018 pay period. Amount withheld from Amount paid by Tax employees' gross pay employer Federal income taxes to be withheld Social Security (6.2%) Medicare (1.45%) tax rate Federal unemployment tax State unemployment tax Total SOS

Answer 1

The income and payroll taxes for Jan 2018:
tax	Amt. withheld from	Amount paid
	employee's gross pay	by employer
federal income taxes to be withheld	110000
Social security (6.2%)	550000*6.2% = 34100	550000*6.2% = 34100
Medicare (1.45%)	550000*1.45%=7975	550000*1.45%=7975
Federal unemployment tax (0.6%)		550000*0.6% =3300
State unemployment tax (5.4%)		550000*5.4%=29700
Total	152075	75075

2) journal entries:
Date	Acc Title	Debit $	Credit $
Jan 31 2018	Salaries Expense	550000
	Federal income tax withheld		110000
	Social security tax		34100
	Medicare tax		7975
	Salaries payable		397925
	(being salaries expenses for jan 2018 are made payable)
Jan 31 2018	Payroll taxes	75075
	Social security tax payable		34100
	Medicare tax payable		7975
	FUTA payable		3300
	SUTA payable		29700
	(being employers payroll taxes for Jan 2018 made payable)