The following information pertains to a weekly payroll of Texera Tile Company: a

Question

The following information pertains to a weekly payroll of Texera Tile Company:

a. The total wages earned by employees are $17,340.
b. The state unemployment insurance contribution rate is 3.5%.
c. The entire amount of wages is taxable under FICA, FUTA, and SUTA.
d. The amount withheld from the employees' wages for federal income taxes is $1,850; for state income taxes, $373.10; and for group insurance, $189.00.

Payment of Wages and the Payroll Taxes

Journalize the payment of wages, and record the payroll taxes for this payroll.

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 Group Insurance Premiums Collected Cash Payroll taxes Payroll Taxes FICA Taxes Payable-OASDI FICA Taxes Payable-HI FUTA Taxes Payable SUTA Taxes Payable

Explanation / Answer

Note -It is said in the question that the entire amount of wages is taxable under FUTA. Otherwise wage limit $7,000 only has to be taken into consideration for calculation of FUTA tax. ($7000 x 0.6%)

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Account Debit Credit Payment of wages Wages Expense $17,340 FICA Taxes Payable-OASDI @6.2% $1075.1 FICA Taxes Payable-HI @1.45% $251.4 Employees FIT Payable $1,850 Employees SIT Payable $373.10 Group Insurance Premiums Collected $189 Cash $13,601.4 Payroll taxes Payroll Taxes $2037.4 FICA Taxes Payable-OASDI $1075.1 FICA Taxes Payable-HI $251.4 FUTA Taxes Payable @0.6% $104 SUTA Taxes Payable @3.5% 606.9

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