Question

Example 6-5

The journal entry to record the payroll from Figure 6.1, on pages 6-2 and 6-3, would be:

	Debit	Credit
Wages Expense	24,762.70
FICA Taxes Payable—OASDI		1,535.29
FICA Taxes Payable—HI		359.06
FIT Payable		3,714.00
SIT Payable		55.25
Group Insurance Payments W/H		54.70
Cash		19,044.40

Example 6-7

The journal entry to record the payroll tax entry from Figure 6.1 on pages 6-2 and 6-3 would be (assume a SUTA tax rate of 3.0%):

	Debit	Credit
Payroll Taxes	2,785.81
FICA Taxes Payable—OASDI		1,535.29
FICA Taxes Payable—HI		359.06
FUTA Taxes Payable		148.58
SUTA Taxes Payable		742.88

Vulcra, Inc., has a semimonthly payroll of $67,460 on September 15, 20--. The total payroll is taxable under FICA Taxes-HI; $63,270 is taxable under FICA Taxes-OASDI; and $10,170 is taxable under FUTA and SUTA. The state contribution rate for the company is 4.1%. The amount withheld for federal income taxes is $9,978. The amount withheld for state income taxes is $1,352.

Part A: Payment of the Wages, and the Payroll Taxes

a. Journalize the payment of the wages, and record the payroll taxes on September 15.

If an amount box does not require an entry, leave it blank or enter "0". Round your answers to the nearest cent.

	Account	Debit	Credit
Payment of wages
Payroll taxes

Part B: Payment of Wages

b. Assume that the employees of Vulcra, Inc., must also pay state contributions (disability insurance) of 1% on the taxable payroll of $62,120.00 and that the employees' contributions are to be deducted by the employer. Journalize the September 15 payment of wages, assuming that the state contributions of the employees are kept in a separate account.

If an amount box does not require an entry, leave it blank or enter "0". Round your answers to the nearest cent.

Date	Account	Debit	Credit
Sept. 15

Answer 1

Workings:

	Basis	Amount
Total Salaries		67,460.00
FICA Taxes-HI(1.45%)	67,460.00	978.17
FICA Taxes-OASDI(6.2%)	63,270.00	3,922.74
FUTA (0.6%)	10,170.00	61.02
SUTA(4.1%)	10,170.00	416.97
Federal Income Tax		9,978.00
State Income Tax		1,352.00
State disability Insurance	62,120.00	621.20

a)

	Account Description	Debit	Credit
1	Wages	67,460.00
	FICA Taxes-HI Payable		978.17
	FICA Taxes-OASDI Payable		3,922.74
	Federal Income Tax Payable		9,978.00
	State Income Tax Payable		1,352.00
	Cash		51,229.09
	(Being Payroll Expenses Recorded)
2	Payroll Taxes	16,708.90
	FICA Taxes-HI Payable		978.17
	FICA Taxes-OASDI Payable		3,922.74
	Federal Income Tax Payable		9,978.00
	State Income Tax Payable		1,352.00
	FUTA Payable		61.02
	SUTA Payable		416.97
	(Being Payroll Taxes Recorded)

b)

Account Description	Debit	Credit
Wages	67,460.00
FICA Taxes-HI Payable		978.17
FICA Taxes-OASDI Payable		3,922.74
Federal Income Tax Payable		9,978.00
State Income Tax Payable		1,352.00
State disability Insurance Payable		621.20
Cash		50,607.89
(Being Payroll Expenses Recorded)