Vulcra, Inc., has a semimonthly payroll of $67,160 on September 15, 20--. The to
ID: 2404525 • Letter: V
Question
Vulcra, Inc., has a semimonthly payroll of $67,160 on September 15, 20--. The total payroll is taxable under FICA Taxes-HI; $63,450 is taxable under FICA Taxes-OASDI; and $10,260 is taxable under FUTA and SUTA. The state contribution rate for the company is 4.1%. The amount withheld for federal income taxes is $9,949. The amount withheld for state income taxes is $1,424.
Part A: Payment of the Wages, and the Payroll Taxes
a. Journalize the payment of the wages, and record the payroll taxes on September 15.
If an amount box does not require an entry, leave it blank or enter "0". Round your answers to the nearest cent.
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a. Debit Wages (Gross Pay); credit employee's taxes withheld and Cash (net pay). Debit payroll taxes (total applicable employer's payroll taxes); Credit respective employer's payroll tax liabilities. Remember: Debits must equal credits!
Part B: Payment of Wages
b. Assume that the employees of Vulcra, Inc., must also pay state contributions (disability insurance) of 1% on the taxable payroll of $62,440.00 and that the employees' contributions are to be deducted by the employer. Journalize the September 15 payment of wages, assuming that the state contributions of the employees are kept in a separate account.
If an amount box does not require an entry, leave it blank or enter "0". Round your answers to the nearest cent.
Account Debit Credit Payment of wages Wages Expense FICA Taxes Payable-OASDI FICA Taxes Payable-HI Employees FIT Payable Employees SIT Payable Cash Payroll taxes Payroll Taxes FICA Taxes Payable-OASDI FICA Taxes Payable-HI FUTA Taxes Payable SUTA Taxes PayableExplanation / Answer
a. Account Debit Credit Payment of wages Wages expense 67160.00 FICA taxes payable-OASDI (6.2% x $63450) 3933.90 FICA taxes payable-HI (1.45% x $67160) 973.82 Employees FIT payable 9949 Employees SIT payable 1424 Cash 50879.28 Payroll taxes Payroll taxes 5943.98 FICA taxes payable-OASDI 3933.90 FICA taxes payable-HI 973.82 FUTA taxes payable (6% x $10260) 615.60 SUTA taxes payable (4.1% x $10260) 420.66 b. Date Account Debit Credit Sept. 15 Wages expense 67160.00 FICA taxes payable-OASDI 3933.90 FICA taxes payable-HI 973.82 Employees disability contributions payable (1% x $62440) 624.40 Employees FIT payable 9949.00 Employees SIT payable 1424.00 Cash 50254.88
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