The summary of the payroll for the monthly pay period ending July 15 indicated the following:

Salaries	$180,000
Federal income tax withheld	32,300
Medical insurance withheld	7,370
Social security tax withheld	10,800
Medicare tax withheld	2,700

a. Illustrate the effects on the accounts and the financial statements of the payroll. Employee FICA Tax includes social security tax and medicare tax withheld.

Assets =	Liabilities + Stockholders' Equity
Cash	Employee Federal Income Tax Payable	Employee Medical Insurance Payable	Employee FICA Tax Payable	Retained Earnings

Statement of Cash Flows				Income Statement
July 15	Operating Activities			July 15	Wages and Salaries Expense

b. Illustrate the effects on the accounts and the financial statements of the employer's payroll tax expense for the month. The state unemployment tax rate is 4.2%, and the federal unemployment tax rate is 0.8%. Only $30,000 of salaries are subject to unemployment taxes.

Assets =	Liabilities + Stockholders' Equity
Cash	Employee FICA Tax Payable	FUTA Tax Payable	SUTA Tax Payable	Retained Earnings

Statement of Cash Flows				Income Statement
July 15	No Effect			July 15	Payroll Tax Expense