For the year ended December 31, 2020, Denkinger Electrical Repair Company reports the following summary payroll data.

Gross earnings:

Administrative salaries ............................... $200,000
Electricians’ wages ......................................... 370,000
Total .................................................................. $570,000

Deductions:

FICA taxes ............................................................................ $ 38,645
Federal income taxes withheld .................................... 174,400
State income taxes withheld (3%) ................................ 17,100
United Fund contributions payable ............................. 27,500
Health insurance premiums ........................................... 17,200
Total .................................................................................... $274,845

Denkinger’s payroll taxes are Social Security tax 6.2%, Medicare tax 1.45%, state unemployment 2.5% (due to a stable employment record), and 0.8% federal unemployment. Gross earnings subject to Social Security taxes of 6.2% total $490,000, and gross earnings subject to unemployment taxes total $135,000. No employee exceeds the $127,200 limit related to FICA taxes. 

Instructions

a. Prepare a summary journal entry at December 31 for the full year’s payroll.

b. Journalize the adjusting entry at December 31 to record the employer’s payroll taxes.

c. The W-2 Wage and Tax Statement requires the following dollar data.

Complete the required data for the following employees.

Transcribed Image Text:

FICA Tax Wages, Tips, Other Compensation Federal Income State Income FICA Tax Withheld Tax Withheld Wages Withheld