Question

Example 6-5

The journal entry to record the payroll from Figure 6.1, on pages 6-2 and 6-3, would be:

	Debit	Credit
Wages Expense	24,762.70
FICA Taxes Payable—OASDI		1,535.29
FICA Taxes Payable—HI		359.06
FIT Payable		3,714.00
SIT Payable		55.25
Group Insurance Payments W/H		54.70
Cash		19,044.40

Example 6-7

The journal entry to record the payroll tax entry from Figure 6.1 on pages 6-2 and 6-3 would be (assume a SUTA tax rate of 3.0%):

	Debit	Credit
Payroll Taxes	2,785.81
FICA Taxes Payable—OASDI		1,535.29
FICA Taxes Payable—HI		359.06
FUTA Taxes Payable		148.58
SUTA Taxes Payable		742.88

Kip Bowman is owner and sole employee of KB Corporation. He pays himself a salary of $1,350 each week.

Additional tax information includes:
FICA tax—OASDI		6.2% on first $132,900
FICA tax—HI		1.45% on total pay
Federal income tax		$202.50 per pay
State income tax		22% of the federal income tax withholding
Federal unemployment tax		0.6% on first $7,000
State unemployment tax		0.05% on first $14,000
Additional payroll deductions include:
401(k) plan		3% per pay
Child support garnishment		$120 per pay
Health insurance premium		$100 per pay

Payment of Wages and Payroll Taxes

Record the payroll entry and payroll tax entry for the pay of the week ended June 7 (his year-to-date pay is $28,350).

If an amount box does not require an entry, leave it blank. Round your answers to the nearest cent.

	Account	Debit	Credit
Payment of wages
Payroll taxes

Answer 1

	Account	Debit	Credit
Payment of monthly wages
	Wages Expense	$1,350.00
	FICA Taxes Payable—OASDI ((1350-40.5-100) x 6.2%)		$74.99
	FICA Taxes Payable—HI ((1350-40.5-100)x 1.45%)		$17.54
	FIT Payable		$202.50
	SIT Payable ($202.50*22%)		$44.55
	401(k) plan ($1,350x 3%)		$40.50
	Child support garnishment		$120.00
	Health insurance premium		$100.00
	Cash		$749.92
Note: 401(k) plan and Health insurance premium paid from Pre-Tax dollar
Payroll taxes	Payroll Taxes	$92.53
	FICA Taxes Payable—OASDI		$74.99
	FICA Taxes Payable—HI		$17.54
	FUTA Taxes Payable (Only up to first $7,000)		$0.00
	SUTA Taxes Payable (Only up to first $14,000)		$0.00