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 $60,840 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%, $13,060 of federal income taxes, $1,350 of medical insurance deductions, and $860 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

Regis Company’s:
Tax	January 8 earnings subject to tax	Tax Rate	Tax Amount
FICA-Social Security	86,600	6.20%	5369.20
FICA-Medicare	86,600	1.45%	1255.70
FUTA	86,600	0.60%	519.60
SUTA	86,600	5.40%	4676.40
1.2
Date	General Journal	Debit	Credit
Jan 8	Office salaries expense	25,760.00
	Sales salaries expense	60,840.00
	FICA—Social sec. taxes payable		5,369.20
	FICA—Medicare taxes payable		1,255.70
	Employee fed. inc. taxes payable		13,060.00
	Employee medical insurance payable		1,350.00
	Employee union dues payable		860.00
	Salaries payable		64,705.10
2
Date	General Journal	Debit	Credit
Jan 8	Payroll taxes expense	11,820.90
	FICA—Social sec. taxes payable		5,369.20
	FICA—Medicare taxes payable		1,255.70
	State unemployment taxes payable		4,676.40
	Federal unemployment taxes payable		519.60