Question

(5) The payroll records of a company provided the following data for the weekly pay period ended December 7: Earnings to End of Previous Week S 54,000 40,500 45.000 Federal Income Taxes $216 Union Dues $15 Medical Insurance Deduction $125 125 150 United Way $15 Gross Pay $1,200 900 1.000 Employee Ronald Arthur John Baines Ted Carter 30 15 162 180 -0- The FICA social security tax rate is 6.2% and the FICA Medicare tax rate is 1.45% on all of this week's wages paid to each employee. The federal and state unemployment tax rates are 0.8% and 5.4%, respectively, on the first $7.000 paid to each employee. Prepare the journal entries to (a) accrue the payroll and (b) record payroll taxes expense.

Answer 1

Working on taxes as follows:

Employee	Earnings to End of Previous week [A]	Gross pay [B]	Federal Income Taxes [C]	FICA social security tax           [D = B × 6.2%]	FICA Medicare tax [E = B × 1.45%]	Medical Insurance Deduction [F]	Union Dues [G]	United way [H]	Take Home Pay [I = B - (C+D+E+F+G+H)]
Ronald arthur	$54,000	$1,200	$216	$74.40	$17.40	$125	$15	$15	$737
John Baines	$40,500	$900	$162	$55.80	$13.05	$125	$15	$30	$499
Ted Carter	$45,000	$1,000	$180	$62.00	$14.50	$150	$0	$20	$574
Total	$139,500	$3,100	$558	$192.20	$44.95	$400.00	$30.00	$65.00	$1,810

_______________________________________________________________________________

(a)

Prepare journal entries as follows:

Credit Date Dec. 07 Debit $3,100 Account Titles Salaries expense Federal income tax witholdings payable FICA socail security taxess payable FICA medicare taxes payable Medical Insurance payable Union dues payable United way payable Salaries payable (To record the payroll expense and liabilities) $558 $192.20 $44.95 $400 $30 $65 $1.810

__________________________________________________________________________________

(b)

Prepare jouranl entries as follows:

Date Credit Debit $237.15 Dec. 07 Account Titles Payroll tax expense FICA socail security taxess payable FICA medicare taxes payable (To record employer's share of taxes) $192.20 $44.95

Earnings of Ronald, John, and Ted are above $7,000. therefore employer does not need to pay either Federal or state Unemployment tax.