189.The payroll records of a company provided the following data for the current weekly pay period ended March 12.
EmployeesEarnings
to End of
Previous
Week
Gross
Pay
Federal
Income
Taxes
Medical
Insurance
Deduction
Union
Dues
United
Way
D. Hui $5,800 $800 $120 $35 $10 $10
B. Kim 6,850 1,100 180 35 10 15
C. Sly 12,900 1,440 404 35 10 40
Assume that the Social Security portion of the FICA taxes is 6.2% on the first $117,000 and the Medicare portion is 1.45% of all wages paid to each employee for this pay period. The federal and state unemployment tax rates are 0.8% and 5.4%, respectively, on the first $7,000 paid to each employee. Calculate the net pay for each employee.
190.A company's payroll information for the month of May follows:
Administrative salaries$4,000
Sales salaries5,500
FICA-Social Security taxes withheld589
FICA-Medicare taxes withheld138
Federal income taxes withheld1,300
Medical insurance premiums withheld415
Union dues withheld205
On May 31 the company issued Check No. 4625 payable to the Payroll Bank Account to pay for the May payroll. It issued payroll checks to the employees after depositing the check.
(1) Prepare the journal entry to record (accrue) the employer's payroll for May. (2) Prepare the journal entry to record payment of the May payroll. The federal and state unemployment tax rates are 0.6% and 5.4%, respectively, on the first $7,000 paid to each employee. The wages and salaries subject to these taxes were $6,000. (3) Prepare the journal entry to record the employer's payroll taxes.
191.Cardinal Company sells merchandise for $24,000 cash on March 31 (cost of merchandise is $12,300). The sales tax law requires Cardinal to collect 8.5% sales tax on every dollar of merchandise sold. Record the entry for the sale and its applicable sales tax.
192.Star Recreation receives $48,000 cash in advance ticket sales for 12 home games. Record the advance ticket sales on April 30. Record the revenue earned for the first home game played on August 14.
193.On January 31, Ransom Company's payroll register showed that its employers earned $30,320 of office salaries and $82,750 of sales salaries. Withholdings from the employees' salaries include FICA Social Security taxes as the rate of 6.2%, FICA Medicare taxes at the rate of 1.45%, $16,960 of federal income taxes, $3,350 of medical insurance deductions (which represents 50% of the total cost of the employee medical insurance), and $4,210 of 401(k) retirement contribution deductions. Ransom Company pays the other 50% of the employee insurance cost and matches the employee 401(k) contributions. Several employees earned more than $7,000 for the period which reduced salaries subject to unemployment to $104,000. No employees exceeded the FICA-Social Security taxable wage base.
1. Prepare the journal entry to record Ransom Company's January 31 payroll expenses and liabilities.
2. Prepare the journal entry to record Ransom Company's employer payroll taxes resulting from the January 31 payroll. Ransom's merit rating reduces its state unemployment (SUTA) to 4% of the first $7,000 paid each employee. The federal unemployment tax (FUTA) rate is 0.6%.
3. Prepare the journal entry to record Ransom's additional employee expenses.