OASDI-7.65% on the first $113,700 of earnings per year Medicare-1.45% on all ear
ID: 2540796 • Letter: O
Question
OASDI-7.65% on the first $113,700 of earnings per year Medicare-1.45% on all earning per year FUTA Taxes-0.8% on the first $7,000 of earnings per year SUTA Taxes-1.2% on the first $7,000 of earnings per year . · Total Earnings Total Earnings as of end of last for current pay _pay period Pension payments withheld 3,000 1.200 45 100 0 0 Income Tax withheld Terry Adams Jim Smith Mary Keller Simon Yi Noelle Myers Lu Nise Susan Rowlings Total $114,000 111,200 19,900 56,200 10,000 6,250 400 $317,950 period $5,500 5,000 4,700 4,500 1,200 1,000 400 525 200 188 50 23 $4,345 $1.405 $22,800 Required: A. Prepare one jourmal entry for the wages and salaries paid. B. Prepare one journal entry to record the employer payroll tax expense.Explanation / Answer
The following chart should be considered for Social security tax (OASDI), Medicare, FUTA, and SUTA.
Total ear as of
Total ear current
OASDI
Medicare
FUTA
SUTA
T.A
114000
5500
0
5500 × 1.45% = 79.75
0
0
J.S
111200
5000
(113700 – 111200 =) 2500 × 7.65% = 191.25
5000 × 1.45% = 72.5
0
0
M
19900
4700
4700 × 7.65% = 359.55
4700 × 1.45% = 68.15
0
0
S
56200
4500
4500 × 7.65% = 344.25
4500 × 1.45% = 65.25
0
0
N
10000
1200
1200 × 7.65% = 91.8
1200 × 1.45% = 17.4
0
0
L
6250
1000
1000 × 7.65% = 76.5
1000 × 1.45% = 14.5
(7000 – 6250 =) 750 × 0.8% = 6
(7000 – 6250 =) 750 × 1.2% = 9
SR
400
900
900 × 7.65% = 68.85
900 × 1.45% = 13.05
900 × 0.8% = 7.2
900 × 1.2% = 10.8
22800
1132.20
330.60
13.20
19.80
A.
Journal
Date
Accounts titles and explanation
P.ref
Debit $
Credit $
Wages and salaries expense
22,800
Social security tax
1,132.20
Medicare
330.60
Pension payment withheld
4,345
Income tax withheld
1,405
Cash [balance figure]
15,587.2
To record payment of wages and salaries after making all necessary deductions
b.
Journal
Date
Accounts titles and explanation
P.ref
Debit $
Credit $
Payroll tax expense
1,495.80
Social security tax
1,132.20
Medicare
330.60
FUTA
13.20
SUTA
19.80
To record expense for payroll tax of employer
Total ear as of
Total ear current
OASDI
Medicare
FUTA
SUTA
T.A
114000
5500
0
5500 × 1.45% = 79.75
0
0
J.S
111200
5000
(113700 – 111200 =) 2500 × 7.65% = 191.25
5000 × 1.45% = 72.5
0
0
M
19900
4700
4700 × 7.65% = 359.55
4700 × 1.45% = 68.15
0
0
S
56200
4500
4500 × 7.65% = 344.25
4500 × 1.45% = 65.25
0
0
N
10000
1200
1200 × 7.65% = 91.8
1200 × 1.45% = 17.4
0
0
L
6250
1000
1000 × 7.65% = 76.5
1000 × 1.45% = 14.5
(7000 – 6250 =) 750 × 0.8% = 6
(7000 – 6250 =) 750 × 1.2% = 9
SR
400
900
900 × 7.65% = 68.85
900 × 1.45% = 13.05
900 × 0.8% = 7.2
900 × 1.2% = 10.8
22800
1132.20
330.60
13.20
19.80
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