On January 8, the end of the first weekly pay period of the year, Regis Company\

Question

On January 8, the end of the first weekly pay period of the year, Regis Company's payroll register showed that its employees earned $21,760 of office salaries and $70,840 of sales salaries. Withholdings from the employees' salaries include FICA Social Security taxes at the rate of 6.20%, FICA Medicare taxes at the rate of 1.45%, $13,560 of federal income taxes, $1,370 of medical insurance deductions, and $960 of union dues. No employee earned more than $7,000 in this first period.

Prepare the journal entry to record Regis Company's January 8 (employee) payroll expenses and liabilities.

Prepare the journal entry to record Regis’s (employer) payroll taxes resulting from the January 8 payroll. Regis’s merit rating reduces its state unemployment tax rate to 2% of the first $7,000 paid each employee. The federal unemployment tax rate is 0.6%.

Prepare the journal entry to record Regis’s (employer) payroll taxes resulting from the January 8 payroll. Regis’s merit rating reduces its state unemployment tax rate to 2% of the first $7,000 paid each employee. The federal unemployment tax rate is 0.6%.

Explanation / Answer

FICA social security tax = ( $21,760 + $70,840)6.2% =$5,741.20

FICA Medical tax           = $92,600 *1.45%   = $1342.70

Journal entry

Journal entry

Description Debit Credit Office salaries expense $21,760 Sales salary expense $70,840 tWithholding tax payable $13,560 FICA social security tax payable    5,751.20 FICA medical tax payable 1,342.70 Medical insurance payable    1,370.00 union dues payable       960.00 Cash $69,626.10

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