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For the year ended December 31, 2020, Swifty Electrical Repair Company reports the following summary payroll data. Gross earnings: Administrative salaries $184,000 Electricians wages 370,000
For the year ended December 31, 2020, Swifty Electrical Repair Company reports the following summary payroll data.
Gross earnings: | ||
Administrative salaries | $184,000 | |
Electricians wages | 370,000 | |
Total | $554,000 | |
Deductions: | ||
FICA taxes | $37,421 | |
Federal income taxes withheld | 177,000 | |
State income taxes withheld (3%) | 16,620 | |
United Fund contributions payable | 27,700 | |
Health insurance premiums | 18,500 | |
Total | $277,241 |
Swiftys 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 $474,000, and gross earnings subject to unemployment taxes total $121,000. No employee exceeds the $127,200 limit related to FICA taxes.
(a) | Prepare a summary journal entry at December 31 for the full years payroll. | |
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(b) | Journalize the adjusting entry at December 31 to record the employers payroll taxes. |
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