rado Company provides you with following information related to payro transactio

Question

rado Company provides you with following information related to payro transactions for th combined (there are 10 employees). Prepare journal the current month. ll e current month. The numbers below are for the all of the employees entries to record the transactions for Gross Salaries Federal Income Taxes withheld State Income Taxes withheld Medical Insurance withheld S60,000 8,200 $2,100 $800 a. Record the May payroll using the payroll register information given above. Remember to record Social Security and Medicare withholdings (note that the Social Security limit has not been reached yet). b. Recorded the employer's payroll taxes resulting from the May payroll. The company has a state unemployment tax rate to 5.4% of the first $7,000 paid each employee and a federal unemployment tax rate of 0.8% of the first $7,000 paid each employee, (note that the federal and state unemployment limits have not been reached yet). Credit Debit Accounts Part a Part b

Explanation / Answer

JOURNAL

Date

Accounts

Debit

Credit

(a)

Salary Expense

$60,000

   Federal Income tax payable

$8,200

   State Income tax payable

$2,100

   Medical Insurance payable

$800

   FICA- Social security payable

$3,720

   FICA- Medicare payable

$870

    Salary Payable / Cash

$44,310

(Salary payable / paid for the month)

(b)

Payroll taxes Expense

   FICA- Social security payable

$3,720

   FICA- Medicare payable

$870

   FUTA - Tax payable

$480

   SUTA - Tax Payable

$3,240

(Payroll taxes due for the month)

JOURNAL

Date

Accounts

Debit

Credit

(a)

Salary Expense

$60,000

   Federal Income tax payable

$8,200

   State Income tax payable

$2,100

   Medical Insurance payable

$800

   FICA- Social security payable

$3,720

   FICA- Medicare payable

$870

    Salary Payable / Cash

$44,310

(Salary payable / paid for the month)

(b)

Payroll taxes Expense

   FICA- Social security payable

$3,720

   FICA- Medicare payable

$870

   FUTA - Tax payable

$480

   SUTA - Tax Payable

$3,240

(Payroll taxes due for the month)

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