Question

Kip Bowman is owner and sole employee of KB Corporation. He pays himself a salary of $1,650 each week.

Additional tax information includes:
FICA tax—OASDI		6.2% on first $127,200
FICA tax—HI		1.45% on total pay
Federal income tax		$247.50 per pay
State income tax		22% of the federal income tax withholding
Federal unemployment tax		0.6% on first $7,000
State unemployment tax		0.05% on first $14,000
Additional payroll deductions include:
401(k) plan		3% per pay
Child support garnishment		$120 per pay
Health insurance premium		$90 per pay

Payment of Wages and Payroll Taxes

Record the payroll entry and payroll tax entry for the pay of the week ended June 1 (his year-to-date pay is $34,650).

If an amount box does not require an entry, leave it blank or enter "0". Round your answers to the nearest cent.

	Account	Debit	Credit
Payment of wages	Wages Expense
	FICA Taxes Payable-OASDI
	FICA Taxes Payable-HI
	Employees FIT Payable
	Employees SIT Payable
	Retirement Plan Contributions Payable
	Garnishment Payable
	Health Insurance Premiums Payable
	Cash
Payroll taxes	Payroll Taxes
	FICA Taxes Payable-OASDI
	FICA Taxes Payable-HI

Answer 1

EXPLANATION ---- Payment of Wages and Payroll Taxes

Account Debit Credit Payment of wages Wages Expense 1650 FICA Taxes Payable-OASDI 102.3 FICA Taxes Payable-HI 23.93 Employees FIT Payable 247.5 Employees SIT Payable 54.45 Retirement Plan Contributions Payable 49.5 Garnishment Payable 120 Health Insurance Premiums Payable 90 CASH 962.32 Payroll taxes FICA Taxes Payable-OASDI 102.3 FICA Taxes Payable-HI 23.93 Employees FIT Payable 247.5 Employees SIT Payable 54.45 CASH 428.18