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maxonik [38]
2 years ago
7

Lee Financial Services pays employees monthly. Payroll information is listed below for January 2018, the first month of Lee's fi

scal year. Assume that none of the employees exceeded any relevant wage base.
Salaries $470,000
Federal income taxes to be withheld 94,000
Federal unemployment tax rate 0.60%
State unemployment tax rate (after
FUTA deduction) 5.40%
Social security tax rate 6.20%
Medicare tax rate 1.45%
Required:
1. Calculate the income and payroll taxes for the January 2018 pay period.
2. Prepare the appropriate journal entries to record salaries and wages expense (not paid) and payroll tax expense for the January 2018 pay period.
Business
1 answer:
solniwko [45]2 years ago
8 0

Answer and Explanation:

1. The computation is shown below:

As we know that employee taxes involved the social security tax, medicare tax and the income tax

Social security tax

= Gross pay × 6.2%

= $470,000 × 6.2%

= $29,140

Medicare tax

= Gross pay × 1.45%

= $470,000 × 1.45%

= $6,815

And,

Income tax withheld = $94,000

Now payroll taxes involved social security tax, Medicare tax, Federal unemployment tax, and state unemployment tax.

Social security tax

= Gross pay × 6.2%

= $470,000 × 6.2%

= $29,140

Medicare tax

= Gross pay × 1.45%

= $470,000 × 1.45%

= $6,815

Federal unemployment tax is

= Gross pay × 0.6%

= $470,000 × 0.6%

= $2,820

State unemployment tax

= Gross pay × 5.40%

= $470,000 × 5.40%

= $25,380

2. Now the journal entries are

On January, 2018

Salaries wages expense  $470,000

       To Withholding income tax payable  $94,000

       To Social security tax payable  $29,140

       To Medicare tax payable $6,815

       to Salaries and wages payable $340,045

(being salaries and wages expense is recorded)

On Jan 2018

Payroll tax expense  $64,155

      To Social security tax payable $29,140

      To Medicare tax payable $6,815

      To Federal unemployment tax payable $2,820

      To State unemployment tax payable $25,380

(being tax liabilities is recorded)  

 

 

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Answer:

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Explanation:

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2. In order to expedite basic performance improvement team functioning, the team should: A. Establish ground rules. B. Perform f
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Answer:

2-  A. Establish ground rules

3-  D. Top management’s requirements.

Explanation:

2- An effective team is a well-integrated team, where the flow of information occurs effectively and where each member feels equally respected and an important part of the team, being able to contribute with ideas and feedback.

Therefore, for there to be cohesion and improvement of the team's performance, it is necessary to establish basic rules, to guide the behavior and actions of members and for there to be equality among all, in order to avoid conflicts and organize work.

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Which one of the following is a primary market transaction? Group of answer choices Sale of currently outstanding stock by a dea
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Answer:

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Explanation:

Securities are created in the primary market. With an IPO which stands for initial public offering, new stocks are sold to the public by companies on a first time basis.

The sale of a new share of stock in the question is an example of a primary market transaction.

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What is the present value of the following cash flows at a discount rate of 9 percent?
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Answer:

Year 1 PV = 91,743.12

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Explanation:

<em>The present value of future sum is the amount that ought to be invested today at interest rate compounded annually to equal the sum at the end of a particular period.</em>

The present value of a future sum is given as follows:

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