Lee Financial Services pays employees monthly. Payroll information is listed below for January 2021, the first month of Lee’s fiscal year. Assume that none of the employees exceeded any relevant base of pay, such that all benefit percentages apply to the entire $440,000 payroll. Salaries $ 440,000 Federal income taxes to be withheld 88,000 Federal unemployment tax rate 0.60 % State unemployment tax rate (after SUTA deduction) 5.40 % Social security tax rate 6.20 % Medicare tax rate 1.45 % Required:Calculate the income and payroll taxes for the January 2021 pay period. Prepare the appropriate journal entries to record salaries expense and payroll tax expense for the January 2021 pay period.
Lee Financial Services pays employees monthly. Payroll information is listed below for January 2021, the first month of Lee’s fiscal year. Assume that none of the employees exceeded any relevant base of pay, such that all benefit percentages apply to the entire $440,000 payroll. Salaries $ 440,000 Federal income taxes to be withheld 88,000 Federal unemployment tax rate 0.60 % State unemployment tax rate (after SUTA deduction) 5.40 % Social security tax rate 6.20 % Medicare tax rate 1.45 % Required:Calculate the income and payroll taxes for the January 2021 pay period. Prepare the appropriate journal entries to record salaries expense and payroll tax expense for the January 2021 pay period.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Lee Financial Services pays employees monthly. Payroll information is listed below for January 2021, the first month of Lee’s fiscal year. Assume that none of the employees exceeded any relevant base of pay, such that all benefit percentages apply to the entire $440,000 payroll.
| Salaries | $ | 440,000 | |
| Federal income taxes to be withheld | 88,000 | ||
| Federal |
0.60 | % | |
| State unemployment tax rate (after SUTA deduction) | 5.40 | % | |
| Social security tax rate | 6.20 | % | |
| Medicare tax rate | 1.45 | % | |
Required:
Calculate the income and payroll taxes for the January 2021 pay period. Prepare the appropriate
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 4 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education