Question

Problem 11-24 Entries for payroll transactions LO P2, P3 On January 8, the end of the first weekly pay period of the year, Regis Company's payroll register showed that its employees earned $26,760 of office salaries and $60,840 of sales salaries. Withholdings from the employees' salaries include FICA Social Security taxes at the rate of 6.20%, FICA Medicare taxes at the rate of 1.45%, $12,860 of federal income taxes, $1,440 of medical insurance deductions, and $800 of union dues. No employee earned more than $7,000 in this first period. Required: 1.1 Calculate below the amounts for each of these four taxes of Regis Company. Regis's merit rating reduces its state unemployment tax rate to 4% of the first $7,000 paid each employee. The federal unemployment tax rate is 0.60%. (Round your answers to 2 decimal places.) X Answer is complete but not entirely correct. Regis Company's: Tax Tax Rate Tax Amount 6.20% January 8 earnings subject to tax $ 97,600 97,600 X 97.600 x FICA-Social Security FICA-Medicare 6,051.20 1.45% 1,415.20 780.80 FUTA 0.80% X SUTA 97,600 X 2.00% X 1,952.00

Answer 1

1.1 Regis Company

Tax	January 8 Earning Subject to Tax	Tax Rate	Tax Amount
FICA Social Security	$87,600	6.20%	5,431.20
FICA Medicare	$87,600	1.45%	$1,270.20
FUTA	$87,600	0.60%	$525.60
SUTA	$87,600	4%	$3,504

$26,760 + $60,840 = $87,600

1.2 Journal Entry

Date	Account Title and Explanation	Debit	Credit
Jan 08	Office Salaries Expense	$26,760
	Sales Salaries Expense	$60,840
	FICA - Social Security Taxes Payable		$5,431.20
	FICA -Medicare Taxes Payable		$1,270.2
	Employee Fed.Inc Taxes Payable		$12,860
	Employee Medicare Taxes Payable		$1,440
	Employee Union Dues Payable		$800
	Salaries Payable		$65,798.6

Explanation;  

FICA -Social Sec.Taxes Payable = $87,600 × 6.20% = $5,431.20

FICA Medicare Sec.Taxes Payable = $87,600 × 1.45% = $1,270.20

2.  

Date	Account Title and Explanation	Debit	Credit
Jan.08	Payroll Taxes Expense	$10,731
	FICA - Social Sec.Taxes Payable		$5,431.20
	FICA- Medicare Taxes Payable		$1,270.2
	State Unemployment Taxes Payable		$3,504
	Federal Unemployment Taxes Payable		$525.6

Explanation;  

State Unemployment Taxes Payable = $87,600 × 04 = $3,504

Federal Unemployment Taxes Payable = $87,600 ×.04 = $3,504

Federal Unemployment Taxes Payable = $87,600 × .006 = $525.6