Question

The information on earnings and deductions for the pay period ended December 14 from King Company's payroll records is as follows:

		Beginning
		Cumulative
Name	Gross Pay	Earnings
Burgess, J. L.	$396	$6,784
Clayton, M. E.	758	40,055
Drugden, T. F.	857	38,449
Lui, L. W.	1,039	39,619
Sparks, C. R.	4,023	115,159
Stevers, D. H.	814	6,767

For each employee, the Social Security tax is 6.2 percent of the first $118,500 and the employer's Social Security tax is 6.2 percent on the same earnings limit. The Medicare tax is 1.45 percent on all earnings. The federal unemployment tax rate is 0.6 percent of the first $7,000 of earnings of each employee. The state unemployment tax rate is 5.4 percent of the same base.

Determine the total taxable earnings for unemployment, Social Security, and Medicare. If an amount is zero, enter "0".

NAME	BEGINNING CUMULATIVE EARNINGS	TOTAL EARNINGS	ENDING CUMULATIVE EARNINGS	TAXABLE EARNINGS
				UNEMPLOY- MENT	SOCIAL SECURITY	MEDICARE
Burgess, J. L.
Clayton, M. E.
Drugden, T. F.
Lui, L. W.
Sparks, C. R.
Stevers, D. H.
Total

Prepare a general journal entry to record the employer's payroll taxes. If an amount box does not require an entry, leave it blank. If required, round your intermediate calculations and final answers to the nearest cent and use the rounded answers in subsequent computations.

GENERAL JOURNAL						PAGE
DATE	DESCRIPTION	DOC. NO.		POST. REF.	DEBIT	CREDIT
20--
Dec. 14
	To record employer's share of FICA taxes and employer's state and federal unemployment taxes.

Answer 1

NAME	BEGINNING CUMULATIVE EARNINGS	TOTAL EARNINGS	ENDING CUMULATIVE EARNINGS	TAXABLE EARNINGS
				UNEMPLOYMENT	SOCIAL SECURITY	MEDICARE
Burgess, J. L.	6784	396	7180	216	396	396
Clayton, M. E.	40055	758	40813	0	758	758
Drugden, T. F.	38449	857	39306	0	857	857
Lui. L. W.	39619	1039	40658	0	1039	1039
Sparks, C. R.	115159	4023	119182	0	3341	4023
Stevers, D. H.	6767	814	7581	233	814	814
Total	246833	7887	254720	449	7205	7887

GENERAL JOURNAL					PAGE
DATE	DESCRIPTION	DOC. NO.	POST. REF.	DEBIT	CREDIT
20--
Dec. 14	Payroll Tax Expense			588.01
	FICA Social Security Tax Payable (6.2% x $7205)				446.71
	FICA Medicare Tax Payable (1.45% x $7887)				114.36
	State Unemployment Tax Payable (5.4% x $449)				24.25
	Federal Unemployment Tax Payable (0.6% x $449)				2.69
	To record employer's share of FICA taxes and employer's state and federal unemployment taxes.