Question

On January 8, the end of the first weekly pay period of the year, Regis Company's employees earned $25,760 of office salaries and $70,840 of sales salaries. Withholdings from the employees' salaries include FICA Social Security taxes at the rate of 6.2%, FICA Medicare taxes at the rate of 1.45%, $13,160 of federal income taxes, $1,390 of medical insurance deductions, and $880 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 state unemployment tax rate is 5.4% of the first $7,000 paid to each employee. The federal unemployment tax rate is 0.6%.
1.2 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

Ans:

1a	Tax	January 8 earnings subject to tax	Tax rate	Tax Amount
	FICA-Social Security	96600	6.20%	5989.20
	FICA - Medicare	96600	1.45%	1400.7
	FUTA	96600	2%	1932
	SUTA	96600	4%	3864
1b	Date	Account title and Explanation	Debit	Credit
	Jan, 08	Salaries expense	96600
		FICA-Social Security payable		5989.20
		FICA - Medicare payable		1400.7
		Federal income tax Payable		13,160
		Medical Insurance deduction payable		1390
		Union dues Payable		880
		Salaries Payable		73780.10
		(To record employee expense)
2	Date	Account title and Explanation	Debit	Credit
	Jan, 08	Employer Payroll tax expense	13185.90
		FICA-Social Security payable		5989.20
		FICA - Medicare payable		1400.7
		FUTA payable		1932
		SUTA payable		3864
		(To record employer tax expenses)

*96600=25760+70840

Hope this helped ! Let me know in case of any queries.