P11-5A Prepare entries for payroll and payroll taxes; prepare W-2 data . (LO 3)
ID: 2749825 • Letter: P
Question
P11-5A
Prepare entries for payroll and payroll taxes; prepare W-2 data.
(LO 3)
For the year ended December 31, 2017, Denkinger Electrical Repair Company reports the following summary payroll data.
Denkinger Company's payroll taxes are Social Security tax 6.2%, Medicare tax 1.45%, state unemployment 2.5% (due to a stable employment record), and 0.8% federal unemployment. Gross earnings subject to Social Security taxes of 6.2% total $490,000, and gross earnings subject to unemployment taxes total $135,000.
Instructions
(a)
Prepare a summary journal entry at December 31 for the full year's payroll.
Salaries and wages payable $295,155
(b)
Journalize the adjusting entry at December 31 to record the employer's payroll taxes.
Payroll tax expense $43,100
(c)
The W-2 Wage and Tax Statement requires the following dollar data.
Wages, Tips,
Other Compensation
Federal Income
Tax Withheld
State Income
Tax Withheld
FICA
Wages
FICA Tax
Withheld
Complete the required data for the following employees.
Gross earnings: Administrative salaries $200,000 Electricians' wages 370,000 Total $570,000 Deductions: FICA taxes $ 38,645 Federal income taxes withheld 174,400 State income taxes withheld (3%) 17,100 United Fund contributions payable 27,500 Health insurance premiums 17,200 Total $274,845Explanation / Answer
No. Date Account Titles and Explanation Debit Credit (a) Salaries and wages expense 2,95,155 Salaries and wages payable 295155 b) Payroll tax expense 43,100 Cash 43,100 Fica waages less than base limit so entire subject to taxes Fica Tax withheld=(6.2%+1.45%)*FICA wages Wages, Tips, Federal Income State Income FICA FICA Tax Other Compensation Tax Withheld Tax Withheld Wages Withheld 59,000 28,500 1770 59,000 4513.50 26,000 10,200 780 26,000 1989.00 State Income Tax Withheld=3% of Earnings
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