Question

On January 8, the end of the first weekly pay period of the year, Regis Company’s employees earned $22,760 of office salaries and $65,840 of sales salaries. Withholdings from the employees’ salaries include FICA Social Security taxes at the rate of 6.2%, FICA Medicare taxes at the rate of 1.45%, $12,860 of federal income taxes, $1,340 of medical insurance deductions, and $840 of union dues. No employee earned more than $7,000 in this first period. Required: 1-a. Calculate below the amounts for each of these four taxes of Regis Company. Regis’s state unemployment tax rate is 5.4% of the first $7,000 paid to each employee. The federal unemployment tax rate is 0.6%. 1-b. Prepare the journal entry to record Regis Company’s January 8 employee payroll expenses and liabilities. 2. Prepare the journal entry to record Regis’s employer payroll taxes resulting from the January 8 payroll. Regis’s state unemployment tax rate is 5.4% of the first $7,000 paid to each employee. The federal unemployment tax rate is 0.6%.

Answer 1

Answer:

1)

Total salaries payable = $22,760 + $65,840 = $88,600

• State unemployment tax rate is 5.4% = $4,784
• Federal unemployment tax rate is 0.6% = $532
• FICA Social Security 6.2% = $5,493
• FICA Medicare 1.45% = $1,285

federal income taxes withheld = $12,860

medical insurance deductions = $1,340

union dues = $840

January 8, payroll expenses:

Dr Wages expense 88,600

    Cr Federal income taxes withheld payable 12,860

    Cr Medical insurance withheld payable 1,340

    Cr FICA Social Security withheld payable 5,493

    Cr FICA Medicare withheld payable 1,285

    Cr Unions dues withheld payable 840

    Cr Wages payable 66,786

2)

January 8, employer payroll taxes

Dr Payroll tax expense 12,094

    Cr FICA Social Security payable 5,493

    Cr FICA Medicare payable 1,285

    Cr State unemployment tax payable 4,784

    Cr Federal unemployment tax payable 532