On January 31, Hale company\'s payroll register showed that it\'s employers earn

Question

On January 31, Hale company's payroll register showed that it's employers earned $ 30,320 of office salaries and $82,750 of sales salaries. Withholdings from the employees salaries include FICA SS taxes at a rate of 6.2%, FICA Medicare taxes at a rate of 1.45%, $16,960 of federal income taxes , $2, 350 of medical insurance deductions (which represents 50% of the total cost of the employee medical insurance) and $4,210 of 401K retirement contribution deductions. Hale company pays the other 50% of the employee insurance cost and matches the 401K contributions. Several employees earned more than $7000 for the period which reduced salaries subject to unemployment to $110,000. no employees exceeded the FICA Social Security taxable wage base.

1.) Prepare the journal entry to record Hale company's January 31 payroll expenses and liabilities.

2.) Prepare the journal entry to record the Hale company's employer payroll taxes resulting from the January 31 payroll. Hale's merit rating reduces its state unemployment to 4% of the first $7000 paid each employee. the federal unemployment tax rate is .8%

3.) Prepare the journal entry to record Hale's additional employee expenses.

Thank you for your help!

Explanation / Answer

Hi,

Please find the answer as follows:

Part 1:

Office Salaries Expense Dr. 30320

Sales Salaries Expense Dr. 82750

FICA-Social Security Taxes Payable (113070*.062) Cr. 7010.34

FICA-Medicare Taxes Payable (113070*.0145) Cr. 1639.52

Employee Federal Income Taxes Payable Cr. 16960

Employee Medical Insurance Payable Cr. 2350

Employee Retirement Program Payable Cr. 4210

Salaries Payable Cr. 80900.14

Part 2:

Payroll Tax Expense Dr. 13929.86

FICA-Social Security Taxes Payable (113070*.062) Cr. 7010.34

FICA-Medicare Taxes Payable (113070*.0145) Cr. 1639.52

State Unemployment Taxes Payable (110000*.04) Cr. 4400

Federal Unemployment Taxes Payable (110000*.008) Cr. 880

Part 3:

Employee Benefits Expense Dr. 6560

Employee Medical Insurance Payable Cr. 2350

Employee Retirement Program Payable Cr. 4210

Thanks.

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