Question

Problem 11-05A (Video) For the year ended December 31, 2020, Sunland Electrical Repair Company reports the following summary payroll data. Gross earnings: Administrative salaries Electricians' wages Total $186,000 390,000 $576,000 Deductions: FICA taxes Federal income taxes withheld State income taxes withheld (3%) United Fund contributions payable Health insurance premiums Total $38,546 166,500 17,280 28,800 18,000 $269,126 Sunland's payroll taxes are Social Security tax 6.2%, Medicare tax 1.45%, state unemployment 2.5% (due to a stable employment record), and 0.8% federal unemployment. Gross earnings subject to Social Security taxes of 6.2% total $487,000, and gross earnings subject to unemployment taxes total $124,000. No employee exceeds the $127,200 limit related to FICA taxes. (a) Prepare a summary journal entry at December 31 for the full year's payroll. (b) Journalize the adjusting entry at December 31 to record the employer's payroll taxes.

Answer 1

a &b

No	Account Titles	Debit	Credit
a	Salaries and wages expense	576,000
	FICA Taxes payable		38,546
	State Income Taxes payable		17,280
	United Fund contributions payable		28800
	Health insurance payable		18000
	Salaries and wages payable		306,874
	Federal Income Taxes payable		166,500
Jan.15	Payroll Tax expense	42638
	FICA Taxes payable [576000*1.45% + 487000*6.2%]		38,546
	State unemployment taxes payable [124,000*2.5%]		3100
	Federal unemployment taxes payable [124,000*0.8%]		992

c.

Employee	Wages,tips ,other compensation	Federal Income tax withheld	State Income tax withheld [2.5%]	FICA Wages	FICA tax withheld [7.65%]
Maria	58000	28420	1450	58000	4437
Jennifer	28000	10920	700	28000	2142