Question

Kip Bowman is owner and sole employee of KB Corporation. He pays himself a salary of $1,500 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	$232.00 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	$100 per pay
	Health insurance premium	$95 per pay

Record the payroll entry and payroll tax entry for the pay of the week ended June 7 (his year-to-date pay is $31,500).

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		fill in the blank cebb6ef47fe0062_2	fill in the blank cebb6ef47fe0062_3
		fill in the blank cebb6ef47fe0062_5	fill in the blank cebb6ef47fe0062_6
		fill in the blank cebb6ef47fe0062_8	fill in the blank cebb6ef47fe0062_9
		fill in the blank cebb6ef47fe0062_11	fill in the blank cebb6ef47fe0062_12
		fill in the blank cebb6ef47fe0062_14	fill in the blank cebb6ef47fe0062_15
		fill in the blank cebb6ef47fe0062_17	fill in the blank cebb6ef47fe0062_18
		fill in the blank cebb6ef47fe0062_20	fill in the blank cebb6ef47fe0062_21
		fill in the blank cebb6ef47fe0062_23	fill in the blank cebb6ef47fe0062_24
		fill in the blank cebb6ef47fe0062_26	fill in the blank cebb6ef47fe0062_27
Payroll taxes		fill in the blank cebb6ef47fe0062_29	fill in the blank cebb6ef47fe0062_30
		fill in the blank cebb6ef47fe0062_32	fill in the blank cebb6ef47fe0062_33
		fill in the blank cebb6ef47fe0062_35	fill in the blank cebb6ef47fe0062_36

Answer 1

Event	Account Titles and Explanations	Debit   (in $ )	Credit (in $ )
Payment of wages	Wages Expense	$ 1,500
	FICA Taxes Payable-OASDI               ( $ 1,500 x 6.2% )		$ 93
	FICA Taxes Payable-HI               ( $ 1,500 x 1.45% )		$ 21.75
	Employees FIT Payable		$ 232
	Employees SIT Payable               ( $ 232 x 22% )		$ 51.04
	Retirement Plan Contributions Payable           ( $ 1,500 x 3% )		$ 45
	Garnishment Payable		$ 100
	Health Insurance Premiums Payable		$ 95
	Cash		$ 862.21
	(To record the Payment of wages )
Payroll taxes	Payroll Taxes	$ 114.75
	FICA Taxes Payable-OASDI               ( $ 1,500 x 6.2% )		$ 93
	FICA Taxes Payable-HI               ( $ 1,500 x 1.45% )		$ 21.75
	(To record the Payroll taxes )