Hi, I need help with this question Thank you Payroll Entries Salaries Federal in

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Payroll Entries Salaries Federal income tax withheld The salaries were all subject to the 6.0% social security tax and the 1.5% Medicare tax. In addition, state and federal unemployment taxes were calculated at $673,000 134,600 LGO LGO LGO the rate of 5.4% and 0.8%, respectively, on $13,000 of salaries. If an amount box does not require an entry, leave it blank. a. Journalize the entry to record the payroll for the week of May 18. May 18 673,000 V LGO 195 X LGO ] V- Federal Income Tax Payable · ALGO ALGO ALGO Previous 422 AM /15/2018

Explanation / Answer

Explanation

a. Federal Insurance Contributions Act (FICA) taxes - Social Security tax and Medicare tax are collectively known as FICA taxes,

b. Unemployment taxes - Federal Unemployment tax, State Unemployment tax.

QUESTION - 1

1. Calculation of tax amounts

Net salaries payable to employees = Gross wages - Taxes = $673,000 - $40,380 - $10,095 - $134,600

Net salaries payable to employees = $487,925

2. Journal Entires

a. Journal enties to record the payroll for the week of May, 2018:

b. Journal entries to record the payroll tax expense for the week of May, 2018:

Note - Since the payroll tax expense is an expense to the employer, payroll tax expense account has to debited.

QUESTION - 2

1. Calculation of tax amounts

Net salaries payable to employees = Gross wages - Taxes = $310,000 - $16,740 - $4,185 - $62,000

Net salaries payable to employees = $227,075

2. Journal Entires

a. Journal enties to record the payroll for the week of June, 2017:

b. Journal entries to record the payroll tax expense for the week of June, 2017:

Note - Since the payroll tax expense is an expense to the employer, payroll tax expense account has to debited.

Amount on which tax rate is applicable Tax Rate Tax amount Payable by Employee Payable by Employer Social Security Tax $673,000 6% $673,000 x 6% $40,380 $40,380 $40,380 Medicare Tax $673,000 1.5% $673,000 x 1.5% $10,095 $10,095 $10,095 Federal Unemployment Tax $13,000 5.4% $13,000 x 5.4% $702 Not applicable $702 State Unemployment Tax $13,000 0.8% $13,000 x 0.8% $104 Not applicable $104

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