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Homework answers / question archive / On January 8, the end of the first weekly pay period of the year, Regis Company's employees earned $27,760 of office salaries and $70,840 of sales salaries
On January 8, the end of the first weekly pay period of the year, Regis Company's employees earned $27,760 of office salaries and $70,840 of sales salaries. Withholdings from the employees' salaries include FICA Social Security taxes at the rate of 6.2%, FICA Medicare taxes at the rate of 1.45%, $13,460 of federal income taxes, $1,440 of medical insurance deductions, and $860 of union dues. No employee earned more than $7,000 in this first period.
Required:
1.1 Calculate below the amounts for each of these four taxes of Regis Company. Regis's state unemployment tax rate is 5.4% of the first $7,000 paid to each employee. The federal unemployment tax rate is 0.6%.
1.2 Prepare the journal entry to record Regis Company's January 8 employee payroll expenses and liabilities.
2. Prepare the journal entry to record Regis's employer payroll taxes resulting from the January 8 payroll. Regis's state unemployment tax rate is 5.4% of the first $7,000 paid to each employee. The federal unemployment tax rate is 0.6%.
| 1.1) | |||
| Tax | January 8 Earnings | Tax Rate | Tax Amount |
| subject to tax (27760+70840) | |||
| FICA-Social Security | 98,600 | 6.20% | 6113.2 |
| FICA-Medicare | 98,600 | 1.45% | 1429.7 |
| FUTA | 98,600 | 0.60% | 591.6 |
| SUTA | 98,600 | 5.40% | 5324.4 |
| 1.2) | |||
| Date | General Journal | Debit | Credit |
| Jan-08 | Office salaries expense | 27,760.00 | |
| Sales salaries expense | 70,840.00 | ||
| FICA—Social sec. taxes payable | 6,113.20 | ||
| FICA—Medicare taxes payable | 1,429.70 | ||
| Employee fed. inc. taxes payable | 13,460.00 | ||
| Employee medical insurance payable | 1,440.00 | ||
| Employee union dues payable | 860 | ||
| Salaries payable | 75,297.10 | ||
| 2) | |||
| Date | General Journal | Debit | Credit |
| Jan-08 | Payroll taxes expense | 13,458.90 | |
| FICA—Social sec. taxes payable | 6,113.20 | ||
| FICA—Medicare taxes payable | 1,429.70 | ||
| State unemployment taxes payable | 5,324.40 | ||
| Federal unemployment taxes payable | 591.6 | ||
