Question

Lee Financial Services pays employees monthly. Payroll information is listed below for January 2021, the first month of Lee's fiscal year. Assume that none of the employees exceeded any relevant base of pay, such that all benefit percentages apply to the entire $500,000 payroll. Salaries Federal income taxes to be withheld Federal unemployment tax rate State unemployment tax rate (after SUTA deduction) Social security tax rate Medicare tax rate $500,000 100,000 0.607 5.40% 6.20% 1.45% Required: Calculate the income and payroll taxes for the January 2021 pay period. Prepare the appropriate journal entries to record salaries expense and payroll tax expense for the January 2021 pay period. Complete this question by entering your answers in the tabs below. Payroll Tax General Journal Calculate the income and payroll taxes for the January 2021 pay period. Tax Amount withheld from employees' gross pay Amount paid by employer Federal income taxes to be withheld Social Security tax Medicare tax Federal unemployment tax State unemployment tax Total

Answer 1

Tax	Amount withheld from employees' gross pay	Amount paid by employer
Federal income taxes to be withheld	100000
Social Security tax	31000	31000	=500000*6.2%
Medicare tax	7250	7250	=500000*1.45%
Federal unemployment tax		3000	=500000*0.6%
State unemployment tax		27000	=500000*5.4%
Total	138250	68250
General Journal	Debit	Credit
Salaries and wages expense	500000
Withholding taxes payable		100000
Social security taxes payable		31000
Medicare taxes payable		7250
Salaries and wages payable		361750
Payroll tax expense	68250
Social security taxes payable		31000
Medicare taxes payable		7250
Federal unemployment tax payable		3000
State unemployment tax payable		27000