Answer:
1. Journalize Ricardo's expenses for employee benefits and for payroll taxes. Explanations are not required.
Assuming Ricardo has not yet paid the expenses:
XX, 2018, employee benefits and payroll tax expenses
Dr FICA tax (OASDI) expense 3,844
Dr FICA tax (Medicare) expense 899
Dr FUTA tax expense 132
Dr SUTA tax expense 1,188
Dr Worker health insurance 3,000
Dr Worker life insurance 330
Dr 401k plan 6,200
Cr FICA tax (OASDI) payable 3,844
Cr FICA tax (Medicare) payable 899
Cr FUTA tax payable 132
Cr SUTA tax payable 1,188
Cr Worker health insurance payable 3,000
Cr Worker life insurance payable 330
Cr 401k plan payable 6,200
If Ricardo has already paid the expenses and benefits, you should only credit cash for $15,593
2. What was Ricardo's total expense for 2018 related to payroll?
$15,593 + $62,000 = $77,593
Explanation:
salaries expense $62,000
FICA taxes (OASDI) = $62,000 x 6.2% = $3,844
FICA taxes (Medicare) = $62,000 x 1.45% = $899
FUTA taxes = $22,000 x 0.6% = $132
SUTA taxes = $22,000 x 5.4% = $1,188
health insurance $3,000
life insurance $330
retirement benefits $6,200
