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 $25,760 of office salaries and $60,840 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%, $12,760 of federal income taxes, $1,330 of medical insurance deductions, and $800 of union dues. No employee earned more than $7,000 in this first pay period.

Required:

1.1 Calculate below the amounts for each of these four taxes of Regis Company. Regis’s merit rating reduces its state unemployment tax rate to 5% of the first $7,000 paid to each employee. The federal unemployment tax rate is 0.60%.(Round your answers to 2 decimal places.)

1.2 Prepare the journal entry to record Regis Company's January 8 (employee) payroll expenses and liabilities. (Round your answers to 2 decimal places.)

2. 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 5% of the first $7,000 paid to each employee. The federal unemployment tax rate is 0.60%. (Round your answers to 2 decimal places.)

Explanation / Answer

1.1 Regis Company’s: Tax January 8 earnings subject to tax Tax Rate Tax Amount FICA-Social Security $86,600 6.20% $5,369.20 FICA-Medicare $86,600 1.45% $1,255.70 FUTA $86,600 0.60% $519.60 SUTA $86,600 5.00% $4,330.00 1.2 Date General Journal Debit Credit 8-Jan Office salaries expense 25,760.00 Sales salaries expense 60,840.00 FICA—Social sec. taxes payable 5,369.20 FICA—Medicare taxes payable 1,255.70 Employee fed. inc. taxes payable 12,760.00 Employee medical insurance payable 1,330.00 Employee union dues payable 800 Salaries payable 65,085.10 1.3 Date General Journal Debit Credit 8-Jan Payroll taxes expense 11,474.50 FICA—Social sec. taxes payable 5,369.20 FICA—Medicare taxes payable 1,255.70 State unemployment taxes payable 4,330.00 Federal unemployment taxes payable 519.60

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