Question

Muller Corp. pays its employees monthly. The payroll information listed below is for January 2018, the first month of Muller’s fiscal year.

Salaries	$	480,000
Federal income taxes to be withheld		88,000
Federal unemployment tax rate		0.60	%
State unemployment tax rate (after FUTA deduction)		5.40	%
Social Security tax rate		6.20	%
Medicare tax rate		1.45	%

Required:
Prepare the appropriate journal entries to:

Record salaries and wages expense and payroll tax expense for the January 2018 pay period.

Answer 1

Date	Accounts title	Dr	Cr
31 January 2018	salaries and wages expense	480,000
	Federal income taxes payable		88,000
	Social Security tax payable(6.2%*480000)		29760
	Medicare tax payable(1.45%*480000)		6960
	Salaries and wages payable		355280
	[Being salaries and wages expense recorded ]
31 January 2018	payroll tax expense	65520
	Federal unemployment tax payable(0.6%*480000)		2880
	State unemployment tax payable(5.4%*480000)		25920
	Medicare tax payable(1.45%*480000)		6960
	Social Security tax payable(6.2%*480000)		29760
	[Being payroll tax expense recorded]