EXERCISE 7-6 On January 21, the column totals of the payroll register for Great

Question

EXERCISE 7-6 On January 21, the column totals of the payroll register for Great Products Company showed that its sales employees had earned $14,960, its truck driver employees had earned $10,692, and its office employees had earned $8,670. Social Security taxes were withheld at an assumed rate of 6.2 percent, and Medicare taxes were withheld at an assumed rate of 1.45 percent. Other deductions consisted of federal income tax, $3,975, and union dues, $560. Determine the amount of Social Security and Medicare taxes withheld and record the general journal entry for the payroll, crediting Salaries Payable for the net pay. All earnings were taxable. Round amounts to the nearest penny

Explanation / Answer

ans 1 Social security taxes payable 2127.96 (14960+10692+8670)*6.2% medicare Taxes payable (14960+10692+8670)*1,45% 497.67 ans 2 Journal entry Dr Cr Sales salaries expenses $14,960 Salaries expenses (Truck driver) 10692 Office salaries expenses 8670 Social security taxes payable 2127.96 medicare Taxes payable 497.67 Employee federal income taxes payable $3,975 Employees union dues payable 560 Salaries payable $27,161.37

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