Question

8. The company has one employee. In December of 2018, her gross wages are $18,000. The employee's cumulative gross wages prior to this month are $102,000. She pays $3,500 in federal income taxes. She also pays a half of medical insurance ($500 out of $1,000); the company pays another half. SUTA rate is 4.2% a. Record the payroll entry for the employee: b- Record the payroll entry-for the employer

Answer 1

		$
	Cumulative gross wages	102,000
	Add: Gross wages for the current month	18,000
	Total gross wages	120,000
	Federal Income tax	3,500
	Employees's contribution to medical insurance	500
	Employer's contribution to medical insurance	500
	SUTA ( $ 120,000 x 4.2% )	5,040
	Journal entry of Payroll cost for the month of December 2018
Date	Account's tittle	Debit $	Credit $
31-Dec	Salaries and Wages Expenses (Gross Pay)	18,000
	Employer's contribution to medical insurance	500
	Federal Income tax payable		3,500
	Medical insurance payable		1,000
	SUTA		5,040
	Salaries and Wages Payable		8,960
	( Salary for the month of December become due )