Payroll Accounting

Reed Enterprises has the following data available for its April 30 payroll:

Wages earned	$278,000	*
Federal income taxes withheld	70,300

*All subject to Social Security and Medicare matching and withholding of 6.2% and 1.45%, respectively.

Federal unemployment taxes of 0.75% and state unemployment taxes of 0.80% are payable on $261,000 of the wages earned.

Required:

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When required, round your answers to the nearest cent.

1. Compute the amounts of taxes payable and the amount of wages that will be paid to employees.

Social Security	$fill in the blank 349eaaf36065fbf_1
Medicare	$fill in the blank 349eaaf36065fbf_2
Federal unemployment	$fill in the blank 349eaaf36065fbf_3
State unemployment	$fill in the blank 349eaaf36065fbf_4
Net pay	$fill in the blank 349eaaf36065fbf_5

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Prepare the journal entries to record the wages earned and the payroll taxes. If an amount box does not require an entry, leave it blank.

Apr. 30	Federal Income Taxes Withholding PayableMedicare Taxes Payable (Employee)Social Security Taxes Payable (Employee)Wages ExpenseWages Payable
	Federal Income Taxes Withholding PayableFederal Unemployment Taxes ExpenseMedicare Taxes Expense (Employer)State Unemployment Taxes ExpenseWages Expense
	Federal Unemployment Taxes ExpenseInterest PayableIncome Taxes ExpenseSocial Security Taxes Expense (Employer)Social Security Taxes Payable (Employee)
	Interest ReceivableMedicare Taxes Expense (Employer)Medicare Taxes Payable (Employee)State Unemployment Taxes ExpenseWages Payable
	Accounts PayableCashIncome Taxes ExpenseSocial Security Taxes Expense (Employer)Wages Expense
	(Record wages and liabilities)
Apr. 30	CashFederal Unemployment Taxes ExpenseInterest ExpenseMedicare Taxes Payable (Employer)State Unemployment Taxes Payable
	Accounts PayableFederal Unemployment Taxes PayableIncome Taxes ExpenseSocial Security Taxes Payable (Employer)State Unemployment Taxes Expense
	Interest ExpenseMedicare Taxes Payable (Employer)Social Security Taxes Expense (Employer)Social Security Taxes Payable (Employer)Wages Payable
	Accounts PayableMedicare Taxes Expense (Employer)Federal Unemployment Taxes PayableIncome Taxes ExpenseMedicare Taxes Payable (Employer)
	Federal Unemployment Taxes ExpenseFederal Unemployment Taxes PayableSocial Security Taxes Expense (Employer)State Unemployment Taxes ExpenseWages Expense
	Federal Income Taxes Withholding PayableFederal Unemployment Taxes ExpenseMedicare Taxes Payable (Employee)State Unemployment Taxes ExpenseState Unemployment Taxes Payable
	Accounts ReceivableFederal Unemployment Taxes ExpenseSocial Security Taxes Expense (Employer)Social Security Taxes Payable (Employer)Wages Expense
	CashInterest PayableIncome Taxes ExpenseMedicare Taxes Payable (Employer)State Unemployment Taxes Expense
	(Record employer payroll taxes)

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2. Conceptual Connection: Reed would like to hire a new employee at a salary of $50,000. Assuming the payroll taxes are as described above (with unemployment taxes paid on the first $7,000) and fringe benefits (e.g., health insurance, retirement, etc.) are 30% of gross pay, what will be the total cost of this employee for Reed? Round your answer to two decimal places. $fill in the blank d1a10cffdfdbfb4_1