Friday 30 November 2012

On January 8, the end of the first weekly pay period of the year, Royal Company's payroll register

On January 8, the end of the first weekly pay period of the year, Royal Company's payroll register showed that its employees earned $24,760 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%, $13,260 of federal income taxes, $1,450 of medical insurance deductions, and $820 of union dues. No employee earned more than $7,000 in this first period.
  
Required:
1.1
Calculate FICA Social Security taxes payable and FICA Medicare taxes payable by the employees of Royal Company. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)
  
    
  FICA—Social sec. taxes payable $   
  FICA—Medicare taxes payable $   

  
1.2
Prepare the journal entry to record Royal Company's January 8 (employee) payroll expenses and liabilities. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)
  
Date General Journal Debit Credit
Jan. 8   Office salaries expense     
    Sales salaries expense     
         FICA-Social sec. taxes payable     
         FICA-Medicare taxes payable     
         Employee fed. inc. taxes payable     
         Employee medical insurance payable     
         Employee union dues payable     
         Salaries payable      

  
2.
Prepare the journal entry to record Royal's (employer) payroll taxes resulting from the January 8 payroll. Royal's merit rating reduces its state unemployment tax rate to 5% of the first $7,000 paid each employee. The federal unemployment tax rate is 0.8%. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)

Date General Journal Debit Credit
Jan. 8   Payroll taxes expense     
         FICA-Social sec. taxes payable     
         FICA-Medicare taxes payable     
         State unemployment taxes payable     
         Federal unemployment taxes payable     



Explanation:

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