Question

On January 15, the end of the first biweekly pay period of the year, North Company's payroll register showed that its employees earned $28,000 of sales salaries.Withholdings from the employees' salaries include :FICA Social Security taxes at the rate of 6.2%,FICA Medicare taxes at the rate of 1.45%,$3,800 of federal income taxes, $678 of medical insurance deductions, and $190 of union dues.

No employee earned more than $7,000 in this first period.Prepare the journal entry to record North Company's January 15 (employee) payroll expenses and liabilities.

Answer 1

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Step-by-step explanation:

Salaries Payable = (Salariesexpense - Socialsecurity taxes - Medicaretaxes - Incometaxes - MedicalcareInsurance Education - Union dues)

=$28,000−$1,736−$406−$3,800−$678−$190

=$28,000−$6,810

=$21,190

Hence, the salaries payable are $21,190.

Compute the social security taxes using the equation as shown below:

\begin{array}{c}\\{\rm{Social security taxes}} = {\rm{FICA tax rate}} \times {\rm{Salaries expense}}\\\\ = 6.2\% \times \$ 28,000\\\\ = \$ 1,736\\\end{array}

Socialsecuritytaxes=FICAtaxrate×Salariesexpense

=6.2%×$28,000

=$1,736

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Hence, social security taxes are $1,736.

Compute the Medicare taxes using the equation as shown below:

Medicaretaxes=Medicaretaxrate×Salariesexpense

=1.45%×$28,000

=$406

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Hence, Medicare taxes are $406.

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