Question

Total January payroll for Katen Industries’ 500 union employees was $1,960,000. Federal and state income taxes withheld were $291,000 and $75,000, respectively. The state unemployment tax is 1.9%, the federal unemployment tax is 0.8%, and the combined F.I.C.A. Social and Medicare tax is 7.65% on an employee’s salaries and wages. Katen also withholds union dues of $25 each month for each union employee to be remitted to the union by Katen.

Required:

(a) Prepare Katen’s January 2017 Payroll entry.

(b) Prepare Katen’s January 2017 Payroll Tax Entry  

Answer 1

Date	General Journal	Debit	Credit
Jan 2017	Salaries expense	1960000
	FICA taxes payable [1,960,000*7.65%]		149940
	Federal income taxes withheld		291000
	State income taxes withheld		75000
	Federal unemployment taxes payable [1,960,000*0.8%]		15680
	State unemployment taxes payable [[1,960,000*1.9%]		37240
	Salaries payable		1391140
Jan 2017	Payroll taxes expense	202860.00
	FICA taxes payable		149940.00
	Federal unemployment taxes payable		15680.00
	State unemployment taxes payable		37240.00