Question

"Widmer Company had gross wages of $320,000 during the week ended June 17. The amount of wages subject to social security tax was $320,000, while the amount of wages subject to federal and state unemployment taxes was $48,000. Tax rates are as follows:

Social security 6.0%
Medicare 1.5%
State unemployment 5.4%
Federal unemployment 0.8%"

The total amount withheld from employee wages for federal taxes was $46,000.

Required:
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

Answer:

Dr salaries expense     $320,000

Cr salaries payable                               $250,000

Cr medicare payable                             $4,800

Cr social security payable                      $19,200

Cr federal income taxes payable           $46,000

Dr payroll tax expense     $26976

Cr medicare payable                                                        $4,800

Cr social security payable                                               $19,200

Cr state unemploymet tax payable($48,000*5.4%)          $2592

Cr federal uneployment tax payable($48,000*0.8%)      $384

Explanation:

The payroll for week of June 17  requires that salaries expense is debited with $320,000 while social security is credited with $ 19,200.00   ($480,000*6%).

Medicare is credited with $4,800  (1.5%*$320,000)

Federal income tax payable is $46,000

salaries payable=$320,000-$4,800-$19,200-$46,000