Question

Payroll Entries

Widmer Company had gross wages of $270,000 during the week ended June 17. The amount of wages subject to social security tax was $243,000, while the amount of wages subject to federal and state unemployment taxes was $34,000. Tax rates are as follows:

Social security	6.0%
Medicare	1.5%
State unemployment	5.3%
Federal unemployment	0.8%

The total amount withheld from employee wages for federal taxes was $54,000.

If an amount box does not require an entry, leave it blank.

a. Journalize the entry to record the payroll for the week of June 17.

	Wages Expense
	Social Security Tax Payable
	Medicare Tax Payable
	Employees Federal Income Tax Payable
	Wages Payable

Feedback

Gross pay is the amount that employees have earned before taxes and deductions. A portion of employees' earnings are owed for such items as state and federal taxes. Net pay is also known as take home pay.

Learning Objective 2.

b. Journalize the entry to record the payroll tax expense incurred for the week of June 17.

	Payroll Tax Expense
	Social Security Tax Payable
	Medicare Tax Payable
	State Unemployment Tax Payable
	Federal Unemployment Tax Payable

Answer 1

a
Wages Expense	270000
Social Security Tax Payable		14580	=243000*6%
Medicare Tax Payable		4050	=270000*1.5%
Employees Federal Income Tax Payable		54000
Wages Payable		197370
b
Payroll Tax Expense	20704
Social Security Tax Payable		14580	=243000*6%
Medicare Tax Payable		4050	=270000*1.5%
State Unemployment Tax Payable		1802	=34000*5.3%
Federal Unemployment Tax Payable		272	=34000*0.8%