Question

The following monthly data are taken from Ramirez Company at July 31: Sales salaries, $680,000; Office salaries, $136,000; Federal income taxes withheld, $204,000; State income taxes withheld, $45,500; Social security taxes withheld, $50,592; Medicare taxes withheld, $11,832; Medical insurance premiums, $16,500; Life insurance premiums, $13,500; Union dues deducted, $10,500, and Salaries subject to unemployment taxes, $69,000. The employee pays 40% of medical and life insurance premiums. Assume that FICA taxes are identical to those on employees and that SUTA taxes are 5.4% and FUTA taxes are 0.6 1&2. Using the above information, complete the below table and prepare the journal entries to record accrued payroll and cash payment of the net payroll for July. 3. Using the above information, complete the below table. 4. Record the accrued employer payroll taxes and all other employer-paid expenses and the cash payment of all liabilities for July- assume that FICA taxes are identical to those on employees and that SUTA taxes are 5.4% and FUTA taxes are 0.6%. Complete this question by entering your answers in the tabs below. Req 1 and 2 Reg 3 Req 4 Using the above information, complete the below table and prepare the journal entries to record accrued payroll and cash payment of the net payroll for July. % Paid by Premium Paid Employees by Employees Premium Paid by Employer Premium Employee Medical Insurance Payable Employee Life Insurance Payable Date General Journal Debit Credit Record journal entry for accrued payroll, including employee deductions, for July July 31 Record the cash payment of salaries. July 31 -

Answer 1

Ramirez Company Requirement 1 Total % Paid by Premium paid Premium paid Particulars Premium Employees by Employees Employer Employee Medical 40% 6600 9900 Insurance Payable Employee Life 40% 5400 8100 Insurance Payable 16500 13500

Requirement 2 Journal Enteries Date Particulars Jul-31 Sales Salaries Expense a/c Dr. Office Salaries Expense a/c Dr. To Social Sec. Taxes Payable To Medicare Taxes Payable To Employee Fed. Income Taxes Payable To Employee State Income Taxes Payable To Employee Medical Insurance Payable To Employee Life Insurance Payable To Employee Union Dues Payable To Salaries Payable Debit in $ Credit in $ 680000 136000 50592 11832 204000 45500 6600 5400 10500 481576 Jul-31 Dr. 481576 Salaries Payable a/c To Cash (Salary paid) 481576

Requirement 3 Calculate of Unemployment Tax Amount Salaries Subject to Tax Unemployment Tax Statement Unemployment Taxes 69000 Federal Unemployment Taxes 69000 Total Unemployment Tax Amount Tax Rate 5.40% 0.60% Tax Amount 3726 414 4140 Journal Enteries Date Particulars Debit in $ Credit in $ Jul-31 Payroll Tax Expense a/c Dr. 84564 To Social Sec. Taxes Payable 50592 To Medicare Taxes Payable 11832 To Statement Unemployment Taxes Payable 3726 To Federal Unemployment Taxes Payable 414 To Employee Medical Insurance Payable 9900 To Employee Life Insurance Payable 8100

Requirement 4 Journal Enteries Date Particulars Debit in $ Credit in $ Jul-31 Social Sec. Taxes Payable a/c Dr. 101184 Medicare Taxes Payable a/c Dr. 23664 Employee Fed. Income Taxes Payable a/c Dr. 204000 Employee State Income Taxes Payable a/c Dr. 45500 Employee Medical Insurance Payable a/c Dr. 16500 Employee Life Insurance Payable a/c Dr. 13500 Employee Union Dues Payable a/c Dr. 10500 Federal Unemployment Taxes Payable a/c Dr. 9900 Employee Medical Insurance Payable a/c Dr. 8100 To Cash 432848