Question

During the month of March, Munster Company’s employees earned wages of $64,000. Withholdings related to these wages were $4,896 for Social Security (FICA), $7,500 for federal income tax, $3,100 for state income tax, and $400 for union dues. The company incurred no cost related to these earnings for federal unemployment tax but incurred $700 for state unemployment tax.

Answer 1

A. Debit to salaries and wages expense for 64,000

Credit to FICA taxes payable for 4,896

Credit to Federal Income Tax Payable for 7,500

Credit to State Income Tax Payable for 3,100

Credit to Union Dues Payable for 400

Credit to Salaries and Wages Payable for 48,104

B. Debit to payroll tax expense for 5,596

Credit to FICA tax payable for 4,896

Credit to State Unemployment for 700