Question

On January 15, the end of the first pay period of the year, North Company’s employees...

On January 15, the end of the first pay period of the year, North Company’s employees earned $28,000 of sales salaries. Withholdings from the employees’ salaries include FICA Social Security taxes at the rate of 6.2%, FICA Medicare taxes at the rate of 1.45%, $3,400 of federal income taxes, $440 of medical insurance deductions, and $200 of union dues. No employee earned more than $7,000 in this first period.

Prepare the journal entry to record North Company’s January 15 salaries expense and related liabilities.

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Answer #1
Journal entries:
S.no. Accounts title and explanations Debit $ Credit $
a. Sales Salaries and wages expense 28000
    Federal income tax payable 3400
    FICA Social security tax payable (28000*6.20%) 1736
    FICA Medicare tax payable (28000*1.45%) 406
    Medical insurance payable 440
    Union dues payable 200
    Salaries and wages payable 21818
(for recording salaries and other related liabilities)
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