Question

Alamar Petroleum Company offers its employees the option of contributing retirement funds up to 5% of their wages or salaries, with the contribution being matched by Alamar. The company also pays 85% of medical and life insurance premiums. Deductions relating to these plans and other payroll information for the first biweekly payroll period of February are listed as follows:
   

Wages and salaries	$	3,800,000
Employee contribution to voluntary retirement plan		102,000
Medical insurance premiums		60,000
Life insurance premiums		10,800
Federal income taxes to be withheld		580,000
Local income taxes to be withheld		71,000
Payroll taxes:
Federal unemployment tax rate		0.60	%
State unemployment tax rate (after FUTA deduction)		5.40	%
Social Security tax rate		6.20	%
Medicare tax rate		1.45	%

   
Required:
Prepare the appropriate journal entries to record salaries and wages expense and payroll tax expense for the biweekly pay period. Assume that no employee’s cumulative wages exceed the relevant wage bases for Social Security, and that all employees’ cumulative wages do exceed the relevant unemployment wage bases. Salaries are not yet paid. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer 1