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, $300,000; Office salaries, $60,000; 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 forty percent of medical and life insurance premiums. 1.1 Using the above information, complete the below table. 1.2 Prepare journal entries to record accrued payroll, including employee deductions, for July. 2. Prepare journal entries to record cash payment of the net payroll (salaries payable) for July. Assume that FICA taxes are identical to those on employees and that SUTA taxes are 5.4% and FUTA taxes are 0.8%. 3.1 Using the above information, complete the below table. 3.2 Record the accrued employer payroll taxes and other employer-paid expenses for July-assume that FICA taxes are identical to those on employees and that SUTA taxes are 5.4% and FUTA taxes are 0.8%. 4. Prepare journal entries to record cash payment of all liabilities related to the July payroll.

Explanation / Answer

Medical insurance Premium                 7,000.00 Medical Insurance Premium payable by employees @40%                 2,800.00 Life insurance Premium                 4,000.00 Life Insurance Premium payable by employees @40%                 1,600.00 Salaries subject to unemployment Tax               50,000.00 SUTA Tax @5.4%                 2,700.00 FUTA Tax @0.8%                     400.00 Journal Entries Date Account Title Dr $ Cr $ July 31. Salaries Expense-Sales                    300,000 Salaries Expense-Office                     60,000 Federal Income Tax Payable               90,000 State Income Tax Payable               20,000 FICA Tax Payable               22,320 Medicare Tax Payable                  5,220 Medial Insurance Premium Payable                  2,800 Life Insurance Premium Payable                  1,600 Union dues Collected-Payable                  1,000 Salary Payable             217,060 Payroll & Other Expenses Date Account Title Dr $ Cr $ July 31. FICA Tax Payable               22,320 Medicare Tax Payable                  5,220 Medial Insurance Premium Payable                  4,200 Life Insurance Premium Payable            2,400.00 SUTA Payable            2,700.00 FUTA Payable               400.00 Payroll Tax Expenses Medical Insurance Premium Expenses                   4,200.0 Life Insurance Premium Expenses                   2,400.0 Payroll Expenses                 30,640.0 July 31. Salary Payable               217,060.0 FICA Tax Payable                 44,640.0 Medicare Tax Payable                 10,440.0 Medial Insurance Premium Payable                   7,000.0 Life Insurance Premium Payable                   4,000.0 SUTA Payable                   2,700.0 FUTA Payable                       400.0 Federal Income Tax Payable                     90,000 State Income Tax Payable                     20,000 Union dues Collected-Payable                   1,000.0 Cash           397,240.0

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