The following monthly data are taken from Ramirez Company at July 31: Sales sala

Question

The following monthly data are taken from Ramirez Company at July 31: Sales salaries, $200,000; Office salaries, $160,000; Federal income taxes withheld, $90,000; State income taxes withheld, $20,000; Social security taxes withheld, $22,320; Medicare taxes withheld, $5,220; Medical insurance premiums, $7,000; Life insurance premiums, $4,000; Union dues deducted, $1,000; and Salaries subject to unemployment taxes, $50,000. 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%. 1&2. 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 3. Using the above information, complete the below table 4. Record the accrued employer payroll taxes and all other employer-paid expenses and the cash payment of all liabilities for July- assume that FICA taxes are identical to those on employees and that SUTA taxes are 5.4% and FUTA taxes are 0.6%

Explanation / Answer

Date Accounts Title Dr Cr 1 & 2 Sales Salaries Expense $200,000 Office Salaries Expense 160000 Social Security Tax Payable $22,320 Medicare Tax Payable 5220 Employees Federal Income Tax Payable 90,000 Employees State income tax Payble 20,000 Union dues payable 1,000 Life Insurance premium payable (4000*40%) 1,600 Medical insurance payable (7000*40%) 2800 Salaries Payable $217,060 salaries payable $217,060 Cash $217,060 31-Jul Payroll tax expense 37,140 Social Security Tax Payable $22,320 Medicare Tax Payable $5,220 State Unemployment Tax Payable (50000*5.4%) 2700 Federal Unemployment Tax Payable (50000*.6%) 300 Life Insurance premium payable (4000*60%) 2,400 Medical insurance payable (7000*60%) 4200 (employer benefit expenses recorded) 31-Jul Social Security Tax Payable $44,640 Medicare Tax Payable $10,440 Employees Federal Income Tax Payable 90,000 Employees State income tax Payble 20,000 Union dues payable 1,000 Life Insurance premium payable $4,000 Medical insurance payable 7000 State Unemployment Tax Payable 2700 Federal Unemployment Tax Payable 300 Cash $180,080 (being paymnet of liabilities for payroll paid) If any doubt please comment

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