Urban Window Company had gross wages of $240,000 during the week ended june 17. The amount of wages subject to social security tax was $240,000, while the amount of wages subject to federal and state unemployment taxes was $35,000. Tax rates are as follows:
Social security 6.0%
Medicare 1.5%
States unemployment 5.5%
Federal unemployment 0.8%
The total amount witheld from employee wages for federal taxes was $48,000.

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.

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TomShelby TomShelby · Answer 1 · 2020-02-04T08:25:14+01:00

Answer:

Wages expense 240,000

medicare payable 3,600 credit

social security payable 14,400 credit

wages payable 222,000 credit

payroll taxes 20,205‬ debit

FUTA payable 280 credit

SUTA payable 1,925 credit

medicare payable 3,600 credit

social security payable 14,400 credit

Explanation:

MEDICARE 1.5% Social Security 6&

OASDI/HI $ 240000 3600 14400

FUTA&SUTA $ 35000 SUTA: 5.5% = 1925 FUTA 0.8% = 280

NET WAGES:

240,000 - 3,600 - 14,400 =222,000

payroll taxes:

the employe pays the same amount for OASDI and HI and also pays FUTA and SUTA

14,400 + 3,600 + 1,925 + 280 = 20,205‬