Question

The following payroll journal entries for Oct. 15 were made by your predecessor. For FICA tax, assume that the social security rate is 6.0% and the Medicare rate is 1.5%. The state and federal unemployment tax rates are 5.4% and 0.8%, respectively. The company offers 401k plans to employees. Review the journal entries, then answer the questions that follow.GENERAL JOURNALACCOUNTING EQUATIONDATE ACCOUNT POST. DEBIT CREDIT ASSETS LIABILITIES EQUITY TITLE REF.Oct. 15 Salaries Expense 647,800.00 ? Wages Expense 172,200.0 ? Social Security Tax Payable 49,200.00 ? Medicare Tax Payable 12,300.00 ? Employees Federal Income Tax Payable 147,600.00 ? Medical Insurance Payable 90,200.00 ? Retirement Contributions Payable 123,000.00 ? Salaries Payable 397,700.00 ? 15 Payroll Tax Expense 62,864.00 ? Social Security Tax Payable 49,200.00 ? Medicare Tax Payable 12,300.00 ?Federal Unemployment Tax Payable 176.00 ?State Unemployment Tax Payable 1,188.00 ?In order to confirm the previous clerk’s payroll calculations, you have been asked to supply the following amounts based on your review of the payroll entries. These amounts will be checked against the company records and investigated further if necessary.1. Determine the payroll amount subject to federal and state unemployment taxes in this payroll.2. What is the total payroll for Copperfield and Company shown in these journal entries?3. What is Copperfield and Company’s share of FICA taxes in this payroll?

Answer 1

Answer:

1. We have:

Payroll subject to the federal unemployment taxes = $22,000

Payroll subject to the state unemployment taxes = $22,000

2. Total payroll = $820,000

3. FICA taxes in payroll = $61,500

Explanation:

Note: The data in this question are merged together. They are therefore sorted before answering the question. See the attached pdf file for the complete question with the sorted data.

The explanation of the answers is now provided as follows:

1. Determine the payroll amount subject to federal and state unemployment taxes in this payroll.

Payroll subject to the federal unemployment taxes = Federal unemployment tax payable / Federal unemployment tax rates = 176 / 0.8% = $22,000

Payroll subject to the state unemployment taxes = State unemployment tax payable / State unemployment tax rates = 1,188 / 5.4% = $22,000

2. What is the total payroll for Copperfield and Company shown in these journal entries?

Total payroll = Salaries Expense + Wages Expense = 647,800 + $172,200 = $820,000

3. What is Copperfield and Company’s share of FICA taxes in this payroll?

FICA taxes in payroll = Social security tax payable + Medical tax payable = $49,200 + 12,300 = $61,500

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