Question

Problem 8-74A Payroll Accounting Jet Enterprises has the following data available for its April 30, 2019, payroll: Wages earned $485,000 * Federal income taxes withheld 92,300 * All subject to Social Security and Medicare matching and withholding of 6.2% and 1.45%, respectively. Federal unemployment taxes of 0.70% and state unemployment taxes of 0.90% are payable on $405,700 of the wages earned. Required: If required, round your answers to the nearest cent. 1. Compute the amounts of taxes payable and the amount of wages that will be paid to employees. Enter amounts as positive numbers. Social Security $ 30,070 Medicare $ 7,033 Federal unemployment $ 2,840 State unemployment $ 3,651 Net pay $ 355,597.50 Feedback 1. Payroll taxes are withheld from employee wages and salaries, and then paid to the taxing authority. Prepare the journal entries to record the wages earned and the payroll taxes. If an amount box does not require an entry, leave it blank. Apr. 30 Wages Expense 485,000 Federal Income Taxes Withholding Payable 92,300 Social Security Taxes Payable

Problem 8-74A
Payroll Accounting

Jet Enterprises has the following data available for its April 30, 2019, payroll:

Wages earned	$485,000	*
Federal income taxes withheld	92,300

* All subject to Social Security and Medicare matching and withholding of 6.2% and 1.45%, respectively.

Federal unemployment taxes of 0.70% and state unemployment taxes of 0.90% are payable on $405,700 of the wages earned.

Required:

If required, round your answers to the nearest cent.

1. Compute the amounts of taxes payable and the amount of wages that will be paid to employees. Enter amounts as positive numbers.

Social Security	$
Medicare	$
Federal unemployment	$
State unemployment	$
Net pay	$

Feedback

1. Payroll taxes are withheld from employee wages and salaries, and then paid to the taxing authority.

Prepare the journal entries to record the wages earned and the payroll taxes. If an amount box does not require an entry, leave it blank.

Apr. 30	Wages Expense
	Federal Income Taxes Withholding Payable
	Social Security Taxes Payable (Employee)
	Medicare Taxes Payable (Employee)
	Cash
	(Record wages and liabilities)
Apr. 30	Federal Unemployment Taxes Expense
	State Unemployment Taxes Expense
	Social Security Taxes Expense
	Medicare Taxes Expense
	Federal Unemployment Taxes Payable
	State Unemployment Taxes Payable
	Social Security Taxes Payable (Employer)
	Medicare Taxes Payable (Employer)
	(Record employer payroll taxes)

Feedback

1. Payroll taxes are withheld from employee wages and salaries, and then paid to the taxing authority.

2. Conceptual Connection: Jet would like to hire a new employee at a salary of $65,000. Assuming payroll taxes are as described above (with unemployment taxes paid on the first $9,000) and fringe benefits (e.g., health insurance, retirement, etc.) are 25% of gross pay, what will be the total cost of this employee for Jet? Round your answer to two decimal places.
$

Answer 1

Wages earned		$ 485,000.00
Less: deduction
Federal income taxes withheld	$ 92,300.00
Social Security (485000*6.2%)	$ 30,070.00
Medicare Taxes (485000*1.45%)	$    7,032.50	$ 129,402.50
Net pay		$ 355,597.50

	Employee's Portion	Employer's Portion	Total
Social Security	$ 30,070.00	$    30,070.00	$   60,140.00
Medicare Taxes	$    7,032.50	$      7,032.50	$   14,065.00
Federal unemployment (405700*0.70%)		$      2,839.90	$      2,839.90
State unemployment (405700*0.90%)		$      3,651.30	$      3,651.30
Net pay			$ 355,597.50

General Journal
Event	Date	Description	Debit	Credit
1a	Apr 30	Wages Expense	$ 485,000.00
		Federal Income Taxes Withholding Payable		$     92,300.00
		Social Security Taxes Payable (Employee)		$     30,070.00
		Medicare Taxes Payable (Employee)		$       7,032.50
		Cash		$ 355,597.50
		(Record wages and liabilities)
1b	Apr 30	Federal Unemployment Taxes Expense	$       2,839.90
		State Unemployment Taxes Expense	$       3,651.30
		Social Security Taxes Expense	$    30,070.00
		Medicare Taxes Expense	$       7,032.50
		Federal Unemployment Taxes Payable		$       2,839.90
		State Unemployment Taxes Payable		$       3,651.30
		Social Security Taxes Payable (Employer)		$     30,070.00
		Medicare Taxes Payable (Employer)		$       7,032.50
		(Record employer payroll taxes)

Gross wages	$    65,000.00
Federal Unemployment (9000*0.70%)	$             63.00
State Unemployment (9000*0.90%)	$             81.00
Employer's portion of Social Security (65000*6.2%)	$       4,030.00
Employer's portion of Medicare (65000*1.45%)	$          942.50
Fringe benefits (65000*25%)	$    16,250.00
Total cost of this employee for Jet	$    86,366.50