Question

E11-19 (book/static) Question Help Ricardo's Mexican Restaurant incurred salaries expense of $60,000 for 2018. The payroll expense includes employer FICA tax, in addition to state unemployment tax and federal unemployment tax of the total salaries, $22.000 is subject to unemployment tax. Also, the company provides the following benefits for employees health insurance cost to the company $3,000), life insurance cost to the company, $330), and retirement benefits cost to the company, 10% of salaries expense). (Click the loon to view payroll tax rate information.) Read the requirements Requirement 1. Joumalize Ricardo's expenses for employee benefits and for payroll taxes. Explanations are not required Begin with the entry to accrue Ricardo's employer payroll taxes. (Round all amounts to the nearest cont. Record debits first, then credits. Exclude explanations from journal entries.) Accounts Debit Credit Data Choose from any list or enter any number in the input fields and then click Check Answer

Answer 1

Answer -

1. Answer -

Ricardo's employer payroll taxes:

Date	Accounts	Debit	Credit
	Payroll tax expense	$6063
	FICA-OASDI taxes payable		$3844
	FICA-Medicare taxes payable		$899
	Federal unemployment taxes payable		$132
	State unemployment taxes payable		$1188

Calculation:

1. FICA-OASDI taxes payable:

= $62000 * 6.2%

= $3844

2. FICA-Medicare taxes payable:

= $62000 * 1.45%

= $899

3. Federal unemployment taxes payable:

= $22000 * 0.6%

= $132

4. State unemployment taxes payable:

= $22000 * 5.4%

= $1188

5. Payroll tax expense:

= FICA-OASDI taxes payable + FICA-Medicare taxes payable + Federal unemployment taxes payable + State unemployment taxes payable

= $3844 + $899 + $132 + $1188

= $6063

Ricardo's employee benefit expenses:

Date	Accounts	Debit	Credit
	Employee benefits expense	$9530
	Employee health insurance payable		$3000
	Employee life insurance payable		$330
	Employee retirement benefits payable		$6200

Calculation:

1. Employee retirement benefits payable:

= Salaries expense * 10%

= $62000 * 10%

= $6200

2. Employee benefits expense:

= Employee health insurance payable + Employee life insurance payable + Employee retirement benefits payable

= $3000 + $330 + $6200

= $9530

2. Answer -

Ricardo’s total expense for 2018 related to payroll:

= Salaries expense + Payroll tax expense + Employee benefits expense

= $62000 + $6063 + $9530

Ricardo’s total expense for 2018 related to payroll = $77593