Question

Cal Ruther, an employer, is subject to FICA taxes but exempt from FUTA and SUTA taxes. During the last quarter of the year, his employees earned monthly wages of $9,600, all of which is taxable. The amount of federal income taxes withheld each month is $1,250. Journalize the payment of wages, and record the payroll tax on November 29.

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

Date	Account	Debit	Credit
Nov. 29	Wages Expense
Nov. 29

b. Prior to posting the November 29 payroll transaction, FICA Taxes Payable-OASDI, FICA Taxes Payable-HI, and Employees FIT Payable had zero balances. Ruther must pay the FICA taxes and income taxes withheld on the November 29 payroll. Journalize the electronic transfer of the payroll taxes on December 16.

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
Dec. 16

Answer 1

Cal Ruther, Journal Enteries Debit in $ Credit in $ Particulars Date Nov-29 Wages a/c Dr. 9600 To FICA taxes payable To Federal income tax payable То Cash 734.4 1250 7615.6 (to record payroll on November 29) 9600 x 7.65% = 734.40 Payroll tax expense a/c To FICA taxes payable Nov-29 Dr. 734.4 734.4 (to record employer tax expense on November 29) Dec-16 Federal income tax payable a/c Dr. FICA taxes payable a/c То Cash 1250 Dr. 1468.8 2718.8 (to record payment of payroll taxes on December 16)