A. Cal Ruther, an employer, is subject to FICA taxes but exempt from FUTA and SUTA taxes. During the last quarter of the year, his employees earned monthly wages of $8,500, all of which is taxable. The amount of federal income taxes withheld each month is $1,040. Journalize the payment of wages, and record the payroll tax on November 30.

Prepare Journal Entry

Description Debit Credit

B. Prior to posting the November 30 payroll transaction, FICA Taxes PayableOASDI, FICA Taxes PayableHI, and Employees FIT Payable had zero balances. Ruther must pay the FICA taxes and income taxes withheld on the November 30 payroll. Journalize the electronic transfer of the payroll taxes on December 15.

Prepare Journal Entry

Description Debit Credit

Check Figure: payroll taxes debit, $650.25