Question

Widmer Company had gross wages of $237,000 during the week ended June 17. The amount of wages subject to social security tax was $213,300, while the amount of wages subject to federal and state unemployment taxes was $30,000. Tax rates are as follows:

Social security	6.0%
Medicare	1.5%
State unemployment	5.3%
Federal unemployment	0.8%

The total amount withheld from employee wages for federal taxes was $47,400.

If an amount box does not require an entry, leave it blank.

a. Journalize the entry to record the payroll for the week of June 17.

b. Journalize the entry to record the payroll tax expense incurred for the week of June 17.

Answer 1

Journal Entry
Date	Particulars	Dr. Amt.	Cr. Amt.
a.	Wages Expense	237,000.00
	Federal Taxes Payable		47,400.00
	Social Security Tax Payable		12,798.00	$213,300 X 6%
	Medicare Tax Payable		3,199.50	$213,300 X 1.5%
	Wages Payable		173,602.50
	(To record the payroll expenses)
b.	Payroll Tax Payable	17,827.50
	Social Security Tax Payable		12,798.00	$213,300 X 6%
	Medicare Tax Payable		3,199.50	$213,300 X 1.50%
	State Unemployment Tax Payable		1,590.00	$30,000 X 5.30%
	Federal Unemployment Tax Payable		240.00	$30,000 X 0.80%
	(To record the payroll tax expense)