Question

Exercise 11-8 Recording payroll LO P2, P3 The following monthly data are taken from Ramirez Company at July 31: Sales salaries, $200,000; Office salaries, $160,000; Federal income taxes withheld, $90,000; State income taxes withheld, $20,000; Social security taxes withheld, $22,320; Medicare taxes withheld, $5,220; Medical insurance premiums, $7,000; Life insurance premiums, $4,000; Union dues deducted, $1,000; and Salaries subject to unemployment taxes, $50,000. 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,

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Answer 1

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Solution: As Checked, Part 1 and 2 are completely correct. Part-3): Tax Amt Subiect Tax rate Tax Amount state unemployment taxes payable $ 50,000 5.40%$ 2,700 Federal unemployment taxes payable 50,000 0.60%S 300 $ 3,000 to tax Total Unemployment tax amount

Part-4) ournal entries No Date Account title and explaination bitCredit 1) Jul.31 Payroll Tax expense (plug) $ 30,540 FICA Social security taxes payable FICA Medicare taxes payable State unemployment taxes payable Federal unemployment taxes payable To record the payroll tax expense) $ 22,320 $ 5,220 $ 2,700 $300 2) Jul.31 Employee benefit expense (plug) $ 6,600 Employee medical insurance payable Employee life insurance payable To record the employee benefits) $ 4,200 $ 2,400 44,640 $10,440 $ 2,700 $ 300 90,000 $20,000 $ 7,000 $ 4,000 $ 1,000 3) Jul.31 FICA Social security taxes payable (22320*2) (5220*2) FICA Medicare taxes payable State unemployment taxes payable Federal unemployment taxes payable Employee Federal Income taxes payable Employee State Income taxes payable Employee medical insurance payable Employee life insurance payable Employee union dues payable Cash To record the payment of payroll liabilities) (4200+2800) (2400+1600) (plug 180080