Question
Lee Financial Services pays employees monthly. Payroll information is listed below for January 2013, the first month of Lee's fiscal year. Assume that none of
Lee Financial Services pays employees monthly. Payroll information is listed below for January 2013, the first month of Lee's fiscal year. Assume that none of the employees exceeded any relevant wage base.
Salaries | $ | 480,000 | |
Federal income taxes to be withheld | 96,000 | ||
Federal unemployment tax rate | 0.60 | % | |
State unemployment tax rate (after FUTA deduction) | 5.40 | % | |
Social security tax rate | 6.20 | % | |
Medicare tax rate | 1.45 | % |
1) Complete the following table to calculate the taxes withheld from the employee and the employer
Tax Amount held Employees gross pay Amount paid by employer
Federal income tax withheld ____________ ________________
Social Security (6.2%) ________________ _______________
Medicare (1.45%) tax rate ____________ _____________
Federal Unemployment tax ____________ _____________
State unemployment tax _______________ _________________
2) Prepare the appropriate journal entries to record salaries and wages expense and payroll tax expense for the January 2013 pay period. (If no entry is required for a particular event, select "No journal entry required" in the first account field.)
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