Question

On January 8, the end of the first weekly pay period of the year, Regis Company's payroll register showed that its employees earned $23,760 of office salaries and $60,840 of sales salaries Withholdings from the employees' salaries include FICA Social Security taxes at the rate of 6.20%, FICA Medicare taxes at the rate of 1.45%, $12.960 of federal income taxes. $1,330 of medical insurance deductions, and $880 of union dues. No employee earned more than $7,000 in this first period. Required: 1.1 Calculate below the amounts for each of these four taxes of Regis Company. Regis's merit rating reduces its state unemployment tax rate to 2% of the first $7,000 paid each employee. The federal unemployment tax rate is 0.60% (Round your answers to 2 decimal places.) Regis Company's: January 8 earnings Tax Rate subject to tak Tax Amount FICA-Social Security FICA-Medicare FUTA SUTA

Answer 1

Ans.1.1: Salaries for the month = 23760+60840

= $84600

  Regis Co. Tax:

January 8 earning subject to tax Tax Rate Tax Amount

FICA-Social Security $84600 6.20% $5245.20

FICA-Medicare    $84600 1.45% $1226.70

FUTA    $84600 0.60% $507.60

SUTA    $84600 2.00% $1692.00

Ans. 1.2:

Salaries A/c Dr. $84600

To FICA-Social Security Payable $5245.20

To FICA-Medicare Payable $1226.70

To Medical Insurance Payable $1330.00

To Federal Income Tax Payable    $12960.00

To Union Dues Payable $880.00

To Salaries Payable $62958.10

(Being Salaries payable for the month accounted for along with the deductions)

Ans. 2:

i. Employer's FICA-Social Security Contribution A/c Dr. $5245.20

To FICA-Social Security Payable $5245.20

(Being Employer's Contribution to FICA-Social Security account for)

ii. Employer's FICA-Medicare Contribution A/c Dr. $1226.70

To FICA-Social Security Payable $1226.70

(Being Employer's Contribution to FICA-Social Security account for)

iii. FUTA Expenses A/c Dr. $507.60

SUTA Expenses A/c Dr. $1692.00

To FUTA Payable $507.60

To SUTA Payable $1692.00

(Being Unemployement tax liability accounted for)