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On January 21, the column totals of the payroll register for Great Products Company showed that its sales employees had earned $14,760, its truck driver employees had earned $10,330, and its office employees had earned $8,260. Social Security taxes were withheld at an assumed rate of 6.2 percent, and Medicare taxes were withheld at an assumed rate of 1.45 percent. Other deductions consisted of federal income tax, $4,002; and union dues, $540.

Required:
Determine the amount of Social Security and Medicare taxes withheld and record the general journal entry for the payroll, crediting Salaries Payable for the net pay. All earnings were taxable. Round amounts to the nearest penny

Respuesta :

Parrain

Answer:

a. Social Security Taxes

= Total wages * 6.2%

= (14,760 + 10,330 + 8,260) * 6.2%

= $‭2,067.70

b. Medicare taxes:

= Total wages * 6.2%

= (14,760 + 10,330 + 8,260) * 1.45%

= $483.58

c. Journal entry:

Date                   Account Title                                      Debit                 Credit

Jan, 21               Salaries Expense (Sales)                $14,760

                         Salaries Expense (Office)               $ 8,260

                         Salaries Expense (Truck driver)     $10,330

                         Social Security Tax Payable                                    $2,067.70

                         Medicare Tax payable                                             $  483.58

                         Federal income tax payable                                   $   4,002

                         Union Dues payable                                               $ 540

                         Salaries Payable                                                     $‭26,256.72‬

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