Question

Ricardo's Mexican Restaurant incurred salaries expense of $62,000 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 icon to view payroll tax rate information.) Read the requirements. Requirement 1. Journalize 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 cent. Record debits first, then credits. Exclude explanations from journal entries.) Date Accounts Debit Credit Payroll Tax Expense

Answer 1

193:- FICA- OASDI FICA - Medicare Rate 6.2 % 1.45% 0.6% 5.4% Earning subject to Amount $ 62,000 $3,844 $ 69,000 $ 899 $ 22,000 $ 132 $ 22,000 $ 1188 $3,000 FUTA SUTA Health insurance Life insurance $ 330 Retirement Benifits 10% $ 62,000 $ 6,200 1$ 15,593) Total Payroll Expense I Journal Entries Date Debit ($) Credit ($) $ 6,063 Description Payroll Tax Expense FICA - OASDI Payable FICA - Medicare Payable FUTA - Payable SUTA - Payable C to record Payroll Tax Experse Employee Benefits Expense Health insurance Payable Life insurance Payable Retirement Benefits Payable $3844 $ 899 $ 132 $ 1188 2 $ 9,530 $3,000 $ 330 $ 6,200