Payroll Entries Widmer Company had gross wages of $256,000 during the week ended June 17. The amount of wages subject to social security tax was $230,400, while the amount of wages subject to federal and state unemployment taxes was $32,000. Tax rates are as follows:
Social security 6.0%
Medicare 1.5%
State unemployment 5.4%
Federal unemployment 0.8%
The total amount withheld from employee wagen for federal taxes was $51,200.
a. Journalize the entry to record the payroll for the week of June 17. June 7
b. Journalize the entry to record the payroll tax expense incurred for the week of June 17. June 7

Answer:

a.

Date               Account Title                                              Debit            Credit

June 17          Salaries and Wages Expense                 $256,000

                      Social Security taxes Payable                                       $13,824

                       Medicare taxes payable                                                 $3,840

                       Federal income tax payable                                         $51,200

                        Salaries and Wages Payable                                      $187,136

Working

Social security taxes payable = 6% * 230,400 = $13,824

Medicare taxes payable = 1.5% * 256,000 = $3,840

Salaries payable = 256,000 - 13,824 - 3,840 - 51,200 = $187,136

b.

Date               Account Title                                              Debit            Credit

June 17          Payroll tax expense                                $19,648

                      FICA Taxes payable                                                       $13,824

                     Medicare taxes payable                                                  $3,840

                     State unemployment taxes payable                               $1,728

                      Federal unemployment taxes payable                          $  256

Working

FICA = Social security          

State unemployment taxes payable = 5.4% * 32,000 = $1,728

Federal unemployment taxes payable = 0.8% * 32,000 = $256

Payroll tax expense = 13,824 + 3,840 + 1,728 + 256 = $19,648

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