Wind Beneath My Wings Inc. employs one person to run its wind energy company and July is the first pay period for this employee. The employee’s gross income for the month of July is $6,900. FUTA taxes are 0.6% and SUTA taxes are 5.4% of the first $7,000 paid to the employee. Payroll for the month of July is as follows: FICA Social Security tax rate at 6.2%, FICA Medicare tax rate at 1.45%, federal income tax of $445, state income tax of $82, health-care insurance premium of $450, and pension plan of $320. The employee is responsible for covering 35% of the health insurance premium and the employer is responsible for 65% of the health insurance premium. The employer matches 75% of employee pension plan contributions.
Journal entries to record both employee and employer payroll compensation and deductions.
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Wind Beneath My Wings Inc. employs one person to run its wind energy company and July is the first pay period for this employee. The employee’s gross income for the month of July is $6,900. FUTA taxes are 0.6% and SUTA taxes are 5.4% of the first $7,000 paid to the employee. Payroll for the month of July is as follows: FICA Social Security tax rate at 6.2%, FICA Medicare tax rate at 1.45%, federal income tax of $445, state income tax of $82, health-care insurance premium of $450, and pension plan of $320. The employee is responsible for covering 35% of the health insurance premium and the employer is responsible for 65% of the health insurance premium. The employer matches 75% of employee pension plan contributions.
|
Cash |
Health Insurance Payable | Union Dues Payable |
| Benefits Expense | State |
Federal Unemployment Tax Payable |
|
Salaries Expense |
FICA Medicare Tax Payable | Federal Income Tax Payable |
|
401(k) Retirement Plan Payable |
Employer Payroll Taxes Expense | Vacation Benefit Payable |
|
Local Income Tax Payable |
Pension Plan Payable | Donations Payable |
|
Salaries Payable |
State Income Tax Payable | FICA Social Security Tax Payable |
PLEASE NOTE: You must follow the format in the textbook, along with the order of the payroll items listed in the problem paragraph above. You will enter the account names exactly as written in the table above and all amounts will be rounded to two decimal places using "$" with commas as needed (i.e. $12,345.67).
- Record the
journal entry to recognize employee payroll for the month of July; dated July 31, 2019. -
DR CR CR CR CR CR CR CR - Record remittance of the employee’s salary with cash on August 1.
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DR CR - Record the two journal entries for the employer payroll for the month of July, dated July 31, 2017.
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DR CR CR CR CR -
DR CR CR - Record the two journal entries for the payment in cash of all employer liabilities only on June 1.
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DR DR DR DR DR DR CR -
DR DR CR
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