Widmer Company had gross wages of $240,000 during the week ended June 17. The amount of wages subject to social security tax was $240,000

Widmer Company had gross wages of $240,000 during the week ended June 17. The amount of wages subject to social security tax was $240,000, while the amount of wages subject to federal and state unemployment taxes was $35,000. Tax rates are as follows:










Social security 6.0%
Medicare 1.5%
State unemployment 5.4%
Federal unemployment 0.8%





The total amount withheld from employee wages for federal taxes was $48,000.

a. Journalize the entry to record the payroll for the week of June 17.

b. Journalize the entry to record the payroll tax expense incurred for the week of June 17.


Answer:

















a.
 Wages Expense 240,000
Social Security Tax Payable* 14,400
Medicare Tax Payable** 3,600
Employees Federal Income Tax Payable 48,000
Wages Payable 174,000
* 6.0% × $240,000
** 1.5% × $240,000
b.
 Payroll Tax Expense 20,170
Social Security Tax Payable 14,400
Medicare Tax Payable 3,600
State Unemployment Tax Payable* 1,890
Federal Unemployment Tax Payable** 280
* 5.4% × $35,000
** 0.8% × $35,000