MLSV Company has five employees, each of whom earn $1,600 per month and are paid on the last day of each month. All five have been employed continuously at this amount since February 1. On June 1, the following accounts and balances exist in the general ledger:

FICA Social Security taxes payable	$992 (both EE and ER match)
FICA Medicare Taxes Payable	$232 (both EE and ER match)
EE Federal Income Taxes Payable	$1,050 (liability for May only)
Federal Unemployment Taxes Payable	$96 (liability for April and May)
State Unemployment Taxes Payable	$640 (liability for April & May)

During June & July the company had the following payroll transactions:

June 15 Issued check payable to Security Bank, a federal depository bank authorized to accept employers payments of FICA taxes and employee income tax withholdings. The $2,274 check is in payment of the May FICA and employee income taxes (think about the required journal entry carefully with all the extra info provided).

June 30 Recorded the journal entry for the June salaries payable. Then recorded the cash payment of the June payroll (the company issued checks payable to each employee in payment of the June payroll).

The payroll register shows the following summary totals for the June pay period:

SALARIES

Office Salaries	Shop Salaries	Gross Pay	FICA Taxes	Federal Income Taxes	Net Pay
$3,200	$4,800	$8,000	$496 (SS)	$1,050	$6,338
			$116 (Med)

For this problem divide the federal income taxes evenly. This is to simplify your problem; in practice the amounts withheld may vary between employees.

June 30 Record the employers payroll taxes resulting from the June payroll. The company has a merit rating that reduces its state unemployment tax rate to 4.0% of the first $7,000 paid to each employee. The federal rate is 0.6%.

July 15 Issued check payable to Security Bank in payment of the June FICA and employee income taxes.

July 15 Issued check to the State Tax Commission for the April, May and June state unemployment taxes. Mailed the check and the second-quarter tax return to the State Tax Commissions (you will not be creating this report; this is for informational and demonstration purposes for this problem only of what actually would be required).

July 31 Issued check payable to Security Bank in payment of the employers FUTA taxes for the second quarter of the year.

Mailed Form 941 to the IRS, reporting the FICA taxes and the employees income taxes and the employees federal income tax withholdings for the second quarter. (Hint: Will you need a journal entry? Are you required to transfer any funds with this report? You may want to ask your classmates via the Discussion forum).

Required: Prepare journal entries to record the transactions and events for both June and July. Also, fill out payroll sheet.