Assume an employee of Rocco Rock Company earns $$2,500$ of gross wages during the current pay period and is required to remit to the government $$250$ for income tax and $$125$ for FICA. Consider the following two procedures for paying the employee:

Procedure $1($Withholdings$)$ Procedure $2($No Withholdings$)$

Rocco Rock Company pays the employee net wages of $$2,125$ and will remit income taxes and FICA on behalf of the employee. Rocco Rock Company pays the employee gross wages of $$2,500$ and the employee is responsible for remitting income taxes and FICA himself.

Required:

Ignoring employer payroll taxes, under each procedure calculate $($a$)$ the total amount to be paid by the company and $($b$)$ the amount of cash the employee will have after satisfying all responsibilities to the government. Do your answers for procedures $1$ and $2$ differ for $($a$)?$ For $($b$)?$

Which approach does the government require?

Considering that employers are responsible for matching employees$$ FICA contributions, which procedure will employers prefer?

Prepare the journal entries required by the employer under procedure $1,$ assuming the employee is paid in cash, but the withholdings and matching employer FICA contribution have not yet been paid. $($Do not ignore employer payroll taxes, but assume no unemployment taxes.$)$