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Payroll Taxes Champaign Inc., a company that provides educational consulting services to large universities across the nation, has a gross payroll of $62,000 for the pay period. The entire payroll is subject to Social Security and Medicare taxes. Champaign must also withhold $7,440 in federal income tax from the employees and pay state unemployment tax of $75. Assume that the Social Security tax rate is 6.2%, and Medicare tax rate is 1.45%.
Required:
Provide the necessary journal entries for Champaign to record these payroll taxes (round to nearest penny).

Respuesta :

Parrain

Answer:

Date       Account Title                                                          Debit          Credit

XX-XX    Wages Expense                                                    $62,000

              Federal Income Tax Withholding Payable                              $7,440

              Social Security Taxes Payable (Employee)                            $3,844

              Medicare Taxes Payable (Employee)                                     $  899

              Cash                                                                                         $49,817

Working

Social Security Taxes Payable (Employee) = 6.2% * 62,000 = $3,844

Medicare Taxes Payable (Employee) = 1.45% * 62,000 = $899

Date       Account Title                                                         Debit            Credit

XX-XX   Social Security Taxes Expense (Employer)        $3,844

             Medicare Taxes expense (Employer)                   $899

             State Unemployment tax expense                        $75

             Social Security Taxes Payable (Employer)                             $3,844

             Medicare Taxes Payable (Employer)                                      $899

             State Unemployment tax Payable                                           $75

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