Question

The following monthly data are taken from Ramirez Company at July 31: Sales salaries, $420,000; Office salaries, $84,000; Federal income taxes withheld, $126,000; State income taxes withheld, $28,000; Social security taxes withheld, $31,248; Medicare taxes withheld, $7,308; Medical insurance premiums, $10,000; Life insurance premiums, $7,000; Union dues deducted, $4,000; and Salaries subject to unemployment taxes, $56,000. The employee pays 40% of medical and life insurance premiums. Assume that FICA taxes are identical to those on employees and that SUTA taxes are 5.4% and FUTA taxes are 0.6%.

1. & 2. Using the above information, complete the below table and Prepare the journal entries to record accrued payroll and cash payment of the net payroll for July.
3. Using the above information, complete the below table.
4. Record the accrued employer payroll taxes and all other employer-paid expenses and the cash payment of all liabilities for July.

Answer 1

Date	Particulars	Debit	Credit
31-Jul	Sales Salaries Expensse	$ 420,000.00
	Office Salaries Expenses	$    84,000.00
	Social Sec. Taxes Payable		$    31,248.00
	Medicare Taxes Payable		$      7,308.00
	Employee Fed Income Tax Payable		$ 126,000.00
	Employee State Income Tax Payable		$    28,000.00
	Employee Medical Insurance Payable		$      4,000.00
	Employee Life Insurance Payable		$      2,800.00
	Employee Union Due Payable		$      4,000.00
	Salaries Payable		$ 300,644.00
	(journal for accrual payroll)
31-Jul	Salaries Payable	$ 300,644.00
	Cash		$ 300,644.00
	(salaries payable paid)
31-Jul	Payroll Taxes Expenses	$    52,116.00
	Social Sec. Taxes Payable		$    31,248.00
	Medicare Taxes Payable		$      7,308.00
	SUTA Payable		$      3,024.00
	FUTA Payable		$          336.00
	Employee Medical Insurance Payable		$      6,000.00
	Employee Life Insurance Payable		$      4,200.00
	(accrued employer payroll taxes)
31-Jul	Social Sec. Taxes Payable	$    62,496.00
	Medicare Taxes Payable	$    14,616.00
	SUTA Payable	$      3,024.00
	FUTA Payable	$          336.00
	Employee Medical Insurance Payable	$    10,000.00
	Employee Life Insurance Payable	$      7,000.00
	Employee Union Due Payable	$      4,000.00
	Employee Fed Income Tax Payable	$ 126,000.00
	Employee State Income Tax Payable	$    28,000.00
	Cash		$ 255,472.00