Question

Payroll Entries Widmer Company had gross wages of $256,000 during the week ended June 17. The amount of wages subject to social security tax was $230,400, while the amount of wages subject to federal and state unemployment taxes was $32,000. Tax rates are as follows:

Social security 6.0%
Medicare 1.5%
State unemployment 5.4%
Federal unemployment 0.8%
The total amount withheld from employee wagen for federal taxes was $51,200.
a. Journalize the entry to record the payroll for the week of June 17. June 7
b. Journalize the entry to record the payroll tax expense incurred for the week of June 17. June 7

Answer 1

a.

Date Account Title Debit Credit

June 17 Salaries and Wages Expense $256,000

Social Security taxes Payable $13,824

Medicare taxes payable $3,840

Federal income tax payable $51,200

Salaries and Wages Payable $187,136

Working

Social security taxes payable = 6% * 230,400 = $13,824

Medicare taxes payable = 1.5% * 256,000 = $3,840

Salaries payable = 256,000 - 13,824 - 3,840 - 51,200 = $187,136

b.

Date Account Title Debit Credit

June 17 Payroll tax expense $19,648

FICA Taxes payable $13,824

Medicare taxes payable $3,840

State unemployment taxes payable $1,728

Federal unemployment taxes payable $ 256

Working

FICA = Social security

State unemployment taxes payable = 5.4% * 32,000 = $1,728

Federal unemployment taxes payable = 0.8% * 32,000 = $256

Payroll tax expense = 13,824 + 3,840 + 1,728 + 256 = $19,648