Question

The following monthly data are taken from Ramirez Company at July 31: Sales salaries, $600,000; Office salaries, $120,000; Federal income taxes withheld, $180,000; State income taxes withheld, $40,000; Social security taxes withheld, $44,640; Medicare taxes withheld, $10,440; Medical insurance premiums, $14,500; Life insurance premiums, $11,500; Union dues deducted, $8,500; and Salaries subject to unemployment taxes, $65,000. 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-assume that FICA taxes are identical to those on employees and that SUTA taxes are 5.4% and FUTA taxes are 0.6%.

Number 4 perferably

Answer 1

Solution:-

1 &2
	Total Premium	% paid by employees	Premium paid by employees	Premium paid by employers 60% x Total premium
Employee Medical Insurance Payable	$14,500	40.00%	$5,800	$8,700
Employee Life Insurance Payable	$11,500	40.00%	$4,600	$6,900
Journal Entry	Debit	Credit
Sales Salaries Expense	$600,000
Office Salaries Expense	$120,000
FICA-Social Security Tax Payable		$44,640
FICA-Medicare Tax Payable		$10,440
Federal Income Tax Payable		$180,000
Union dues deducted		$8,500
Employee Medical Insurance Payable		$5,800
Employee Life Insurance Payable		$4,600
State income tax withheld		$40,000
Salaries Payable		$426,020
3 & 4
Tax	Amount subject toTax	Tax Rate	Tax Amount
State unemployment Tax Payable	$65,000	5.40%	$3,510
Federal unemployment Tax Payable	$65,000	0.60%	$390
Journal Entry
Payroll Taxes Expense	$69,380
FICA-Social Security Tax Payable		$44,640
FICA-Medicare Tax Payable		$10,440
Employee Medical Insurance Payable		$5,800
Employee Life Insurance Payable		$4,600
State unemployment Tax Payable		$3,510
Federal unemployment Tax Payable		$390