Question

The following information pertains to a weekly payroll of Texera Tile Company:

a. The total wages earned by employees are $17,340.
b. The state unemployment insurance contribution rate is 3.5%.
c. The entire amount of wages is taxable under FICA, FUTA, and SUTA.
d. The amount withheld from the employees' wages for federal income taxes is $1,850; for state income taxes, $373.10; and for group insurance, $189.00.

Payment of Wages and the Payroll Taxes

Journalize the payment of wages, and record the payroll taxes for this payroll.

If an amount box does not require an entry, leave it blank or enter "0". Round your answers to the nearest cent.

	Account	Debit	Credit
Payment of wages	Wages Expense
	FICA Taxes Payable-OASDI
	FICA Taxes Payable-HI
	Employees FIT Payable
	Employees SIT Payable
	Group Insurance Premiums Collected
	Cash
Payroll taxes	Payroll Taxes
	FICA Taxes Payable-OASDI
	FICA Taxes Payable-HI
	FUTA Taxes Payable
	SUTA Taxes Payable

Answer 1

	Account	Debit	Credit
Payment of wages	Wages Expense	$17,340
	FICA Taxes Payable-OASDI @6.2% of $17,340		$1075.1
	FICA Taxes Payable-HI @1.45% of $17,340		$251.4
	Employees FIT Payable		$1,850
	Employees SIT Payable		$373.10
	Group Insurance Premiums Collected		$189
	Cash [$17,340 - $1,075.1 - $251.4 - $1,850 - $373.10 - $189]		$13,601.4
Payroll taxes	Payroll Taxes	$2037.4
	FICA Taxes Payable-OASDI  [Same as employee portion]		$1075.1
	FICA Taxes Payable-HI   [Same as employee portion]		$251.4
	FUTA Taxes Payable @0.6% of $17,340		$104
	SUTA Taxes Payable @3.5% of $17,340		606.9

Note - It is said in the question that the entire amount of wages is taxable under FUTA. Otherwise, the wage limit of $7,000 has to be taken into consideration for the calculation of FUTA tax.

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