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The following monthly data are taken from Ramirez Company at July 31: Sales salaries, $660,000; Office salaries, $132,000; Federal income taxes withheld, $198,000; State income taxes withheld, $44,000; Social security taxes withheld, $49,104; Medicare taxes withheld, $11,484; Medical insurance premiums, $16,000; Life insurance premiums, $13,000; Union dues deducted, $10,000; and Salaries subject to unemployment taxes, $68,000. The employee pays 40% of medical and life insurance premiums. Assume that FICA taxes are identical to those on employees and that SUTA taxes are 5.4% and FUTA taxes are 0.6%.

Using the above information, complete the below table and Prepare the journal entries to record accrued payroll and cash payment of the net payroll for July.

User Curio
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Answer:

July 31, 202x, salaries expense

Dr Sales salaries expense 660,000

Dr Office salaries expense 132,000

Dr FICA taxes (OASDI) expense 49,104

Dr FICA taxes (Medicare) expense 11,484

Dr FUTA taxes expense 408

Dr SUTA taxes expense 3,672

Dr Life insurance expense 19,500

Dr Medical insurance expense 24,000

Cr Federal income taxes withheld payable 198,000

Cr State income taxes withheld payable 44,000

Cr Social security taxes withheld payable 49,104

Cr Social security taxes payable 49,104

Cr Medicare taxes withheld payable 11,484

Cr Medicare taxes payable 11,484

Cr Medical insurance premiums payable 40,000

Cr Life insurance premiums payable 32,500

Cr Union dues deducted payable 10,000

Cr FUTA taxes payable 408

Cr SUTA taxes payable 3,672

Cr Salaries payable 450,412

July 31, 2021, payment of salaries payable

Dr Salaries payable 450,412

Cr Cash 450,412

Step-by-step explanation:

Sales salaries, $660,000;

Office salaries, $132,000;

Federal income taxes withheld, $198,000;

State income taxes withheld, $44,000;

Social security taxes withheld, $49,104;

Medicare taxes withheld, $11,484;

Medical insurance premiums, $16,000;

Life insurance premiums, $13,000;

Union dues deducted, $10,000; and

Salaries subject to unemployment taxes, $68,000.

  • FUTA = $408
  • SUTA = $3,672

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