The following monthly data are taken from Ramirez Company at July 31: Sales sala
ID: 2487688 • Letter: T
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.
Prepare journal entries to record accrued payroll, including employee deductions, for July.
Prepare journal entries to record cash payment of the net payroll (salaries payable) for July
Prepare journal entries to record accrued employer payroll taxes, and other related employment expenses, for July--assum that FICA taxes are identical to those on employees and that SUTA taxes are 5.4% and FUTA taxes are 0.8%
Prepare journal entries to record cash payment of all liabilities related to the July payroll.
Explanation / Answer
Sales salaries Dr 300000 Office salaries Dr 60000 Federal Income tax payable Cr 90000 State Income tax payable Cr 20000 Social securiy taxes payable Cr 22320 Medicare taxes payable Cr 5220 Medical Insurance premium payable Cr 2800 Life insurance premium payable Cr 1600 Union dues payable Cr 1000 Salary payable Cr 217060 ( to record accrued payroll for July) Salary payable Dr 217060 Cash Cr 217060 ( To record cash paymen of July salary) Social securiy taxes Dr 22320 Medicare taxes Dr 5220 medical insurance premium Dr 4200 Life insurance premium Dr 2400 SUTA Taxes (5.4% of 50000) Dr 2700 FUTA taxes ( 0.8% of 50000) Dr 400 Social securiy taxes payable Cr 22320 Medicare taxes payable Cr 5220 Medical Insurance premium payable Cr 4200 Life insurance premium payable Cr 2400 SUTA taxes payable Cr 2700 FUTA Taxes payable Cr 400 ( To record accrued employers payroll taxes) Federal Income tax payable Dr 90000 State Income tax payable Dr 20000 Social securiy taxes payable Dr 44640 Medicare taxes payable Dr 10440 Medical Insurance premium payable Dr 7000 Life insurance premium payable Dr 4000 Union dues payable Dr 1000 SUTA taxes payable Dr 2700 FUTA Taxes payable Dr 400 Cash Cr 180180 ( to record cash payment of all liabilities)
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