Question

An employee receives an hourly rate of $18, with time and a half for all hours worked in excess of 40 during the week. Payroll data for the current week are as follows: hours worked, 46; federal income tax withheld, $120; cumulative earnings for the year prior to this week, $5,500; Social security tax rate, 7% on maximum of $100,000; and Medicare tax rate, 1.5% on all earnings; state unemployment compensation tax, 4% on the first $7,000; federal unemployment compensation tax, 1% on the first $7,000. Prepare the journal entries to record the salaries expense and the employer payroll tax expense

Answer 1

total salary = (40 x $18) + (6 x $18 x 1.5) = $882

Dr Salaries expense 882

Cr Federal income tax withholding payable 120

Cr OASDI tax withholding payable 61.74

Cr Medicare tax withholding payable 13.23

Cr Salaries payable 687.03

Dr Payroll tax expenses 119.07

Cr OASDI tax payable 61.74

Cr Medicare tax payable 13.23

Cr SUTA tax payable 35.28

Cr FUTA tax payable 8.82