In: Accounting
On January 8, the end of the first weekly pay period of the year, Regis Company's payroll register showed that its employees earned $21,760 of office salaries and $70,840 of sales salaries. Withholdings from the employees' salaries include FICA Social Security taxes at the rate of 6.20%, FICA Medicare taxes at the rate of 1.45%, $12,760 of federal income taxes, $1,340 of medical insurance deductions, and $900 of union dues. No employee earned more than $7,000 in this first period.
1.1 Calculate below the amounts for each of these four taxes of Regis Company. Regis’s merit rating reduces its state unemployment tax rate to 4% of the first $7,000 paid each employee. The federal unemployment tax rate is 0.60%. (Round your answers to 2 decimal places.)
1.2 Prepare the journal entry to record Regis Company's January 8 (employee) payroll expenses and liabilities. (Round your answers to 2 decimal places.)
2. Prepare the journal entry to record Regis’s (employer) payroll taxes resulting from the January 8 payroll. Regis’s merit rating reduces its state unemployment tax rate to 4% of the first $7,000 paid each employee. The federal unemployment tax rate is 0.60%. (Round your answers to 2 decimal places.)
1.1 | |||
Regis Company’s: | |||
Tax | January 8 earnings subject to tax | Tax Rate | Tax Amount |
FICA-Social Security | 92,600 | 6.20% | 5741.20 |
FICA-Medicare | 92,600 | 1.45% | 1342.70 |
FUTA | 92,600 | 0.60% | 555.60 |
SUTA | 92,600 | 4.00% | 3704.00 |
1.2 | |||
Date | General Journal | Debit | Credit |
Jan-08 | Office salaries expense | 21,760.00 | |
Sales salaries expense | 70,840.00 | ||
FICA—Social sec. taxes payable | 5,741.20 | ||
FICA—Medicare taxes payable | 1,342.70 | ||
Employee fed. inc. taxes payable | 12,760.00 | ||
Employee medical insurance payable | 1,340.00 | ||
Employee union dues payable | 900.00 | ||
Salaries payable | 70516.10 | ||
2 | |||
Date | General Journal | Debit | Credit |
Jan-08 | Payroll taxes expense | 11,343.50 | |
FICA—Social sec. taxes payable | 5,741.20 | ||
FICA—Medicare taxes payable | 1,342.70 | ||
State unemployment taxes payable | 3,704.00 | ||
Federal unemployment taxes payable | 555.60 |