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 $22,760 of office salaries and $70,840 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%, $13,260 of federal income taxes, $1,360 of medical insurance deductions, and $960 of union dues. No employee earned more than $7,000 in this first period.

Calculate below the amounts for each of these four taxes of Regis Company. Regis’s merit rating reduces its state unemployment tax rate to 5% of the first $7,000 paid each employee. The federal unemployment tax rate is 0.60%. (Round your answers to 2 decimal places.)

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

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 5% 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) Calcualtion of each of four taxes of Regis Company are as follows:-

Tax	Jan. 8 Earning Subject to Tax($)	Tax Rate(%)	Tax Amount
FICA Social Security	$93600	6.20	5803.20
FICA Medicare	$93600	1.45	1357.20
federal unemployment	$93600	0.60	561.60
state unemployment	$93600	0.50	468.00

(2) Journal entry to record Regis Company's January 8 (employee) payroll expenses and liabilities are as follows:-

Date Journal Entries Debit Credit

Jan 08 Office Salaries Expenses $22760.00

Sales Salaries Expenses $70840.00

FICA Social Security taxes payable $5803.20

FICA Medicare taxes payable $1357.20

Employees Federal Income Tax Payable $13260.00

Employees Medical Insurance Tax Payable $1360.00

Employees union dues payable $960.00

Salaries Payable $70859.60

(3) journal entry to record Regis’s (employer) payroll taxes resulting from the January 8 payroll are as follows:-

Date Journal Entries Debit Credit

Jan 08 Payroll Tax Expenses $12402.00

FICA Social Security taxes payable $5803.20

FICA Medicare taxes payable $1357.20

State Unemployment Tax Payable($93600 *5%) $4680.00

Federal Unemployment Tax Payable($93600*0.60%) $561.60