Question

On January 14, at the end of the second week of the year, the totals of Castle Company's payroll register showed that its store employees' wages amounted to $33,482 and that's warehouse wages amounted to $13,560. Withholdings consisted of federal income taxes, $5,110, employer's Social Security taxes at the rate of 6.2 percent, and employees' Social Security taxes at a rate of 6.2 percent. Both the employer's and employees' Social Security taxes are based on the first $118,500, and no employee has reached the limit. Additional withholdings were Medicare taxes at the rate of 1.45 percent on all earnings and charitable contributions withheld, $845.
Required:
a. Calculate the amount of Social Security and Medicare taxes to be withheld and write the general journal entry to record the payroll. Round answers to two decimal places.
b. Write the general journal entry to record the employer's payroll taxes assuming that the federal unemployment tax is 0.6 percent of the first $7,000, that the state unemployment tax is 5.4 percent of the same base, and that no employee has surpassed the $7,000 limit.

Answer 1

Answer:

a)

Dr Store wages expense 33,482

Dr Warehouse wages expense 13,560

    Cr Federal income tax withholdings payable 5,110

    Cr Social security taxes withheld payable 2,916.60

    Cr Medicare taxes withheld payable 682.11

    Cr Charitable contributions withheld payable 845

    Cr Wages payable 37,488.29

b)

Dr Payroll taxes expense 6,421.23

    Cr Social security taxes payable 2,916.60

    Cr Medicare taxes payable 682.11

    Cr SUTA taxes payable 2,540.27

    Cr FUTA taxes payable 282.25