Question

On January 8, the end of the first weekly pay period of the year, Regis Company's payroll register showed that its employees earned $23,760 of office salaries and $60,840 of sales salaries. Withholdings from the employees' salaries include FICA Social Security taxes at the rate of 6.20%, FICA Medicare taxes at the rate of 1.45%, $13,560 of federal income taxes, $1,420 of medical insurance deductions, and $780 of union dues. No employee earned more than $7,000 in this first period.

Required:
1.1 Calculate below the amounts for each of these four taxes of Regis Company. Regis’s merit rating reduces its state unemployment tax rate to 4% of the first $7,000 paid each employee. The federal unemployment tax rate is 0.60%. (Round your answers to 2 decimal places.)

1.2 Prepare the journal entry to record Regis Company's January 8 (employee) payroll expenses and liabilities. (Round your answers to 2 decimal places.)

2. Prepare the journal entry to record Regis’s (employer) payroll taxes resulting from the January 8 payroll. Regis’s merit rating reduces its state unemployment tax rate to 4% of the first $7,000 paid each employee. The federal unemployment tax rate is 0.60%. (Round your answers to 2 decimal places.)

Answer 1

1.1

Particulars	Amount($)
FICA Social Security ($23,760 + $60,840) x 0.062)	$5245.20
FICA Medicare taxes($23,760 + $60,840) x 0.0145)	$1226.70
Federal unemployment taxes($23,760 + $60,840) x 0.006)	$507.60
State unemployment tax($23,760 + $60,840) x 0.040)	$3384.00

No.	Date	Account Titles and Explanation	Debit	Credit
1.2	Jan 8	Salaries and wages expenses ($23,760 + $60,840)	$84,600
		Salaries and wages payable		$62368.10
		FICA Social Security taxes payable		$5245.20
		FICA Medicare taxes payable		$1226.70
		Federal income taxes payable		$13,560
		Employee medical insurance payable		$1,420
		Employee  union dues payable		$780
		(To record the payroll expenses and liabilities)
2	Jan 8	Payroll tax expense	$10,363.50
		FICA Social Security taxes payable		$5245.20
		FICA Medicare taxes payable		$1226.70
		Federal unemployment taxes payable		$507.60
		State unemployment taxes payable		$3384.00
		(To record the payroll taxes and follows state unemployment and federal unemployment tax)