According to a summary of the payroll of Murtagh Co., $710,000 was subject to the 6.0% social security tax and the 1.5% Medicare tax. Also, $46,000 was subject to state and federal unemployment taxes.

A.	Calculate the employers payroll taxes, using the following rates: state unemployment, 5.4%; federal unemployment, 0.8%

B.	On December 31, journalize the entry to record the accrual of payroll taxes. Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTS

Murtagh Co.

General Ledger

	ASSETS
110	Cash
111	Accounts Receivable
112	Interest Receivable
113	Notes Receivable
115	Merchandise Inventory
116	Supplies
118	Prepaid Insurance
120	Land
123	Building
124	Accumulated Depreciation-Building
125	Office Equipment
126	Accumulated Depreciation-Office Equipment

	LIABILITIES
210	Accounts Payable
213	Interest Payable
214	Notes Payable
215	Salaries Payable
216	Social Security Tax Payable
217	Medicare Tax Payable
218	Employees Federal Income Tax Payable
219	Employees State Income Tax Payable
221	Retirement Savings Deductions Payable
224	Federal Unemployment Tax Payable
225	State Unemployment Tax Payable
226	Vacation Pay Payable
227	Unfunded Pension Liability
228	Product Warranty Payable
229	EPA Fines Payable
230	Litigation Claims Payable

	EQUITY
310	Common Stock
311	Retained Earnings
312	Dividends
313	Income Summary

	REVENUE
410	Sales
610	Interest Revenue

STARTING QUESTION

A. Calculate the employers payroll taxes, using the following rates: state unemployment, 5.4%; federal unemployment, 0.8%

$

JOURNAL

	DATE	DESCRIPTION	POST.REF.	DEBIT	CREDIT
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5