Question

Go Systems had the following payroll data for wages for the week ended February 5. The state income tax is assumed to be 20% of the federal income tax.

				TAXABLE EARNINGS						DEDUCTIONS
TOTAL EARNINGS		ENDING CUMULATIVE EARNINGS		UNEMPLOYMENT		SOCIAL SECURITY		MEDICARE		FEDERAL INCOME TAX		STATE INCOME TAX		SOCIAL SECURITY TAX		MEDICARE TAX
6,770.00		27,850.00		6,770.00		6,770.00		6,770.00		1,015.00		203.00		419.74		98.17

Required:

a. Prepare the general journal entry to record the payroll. If an amount box does not require an entry, leave it blank. If required, round your intermediate calculations and final answers to the nearest cent and use the rounded answers in subsequent computations.

GENERAL JOURNAL						PAGE
DATE	DESCRIPTION	DOC. NO.		POST. REF.	DEBIT	CREDIT
20--
Feb. 5	Wages Expense
	Employees' Federal Income Tax Payable
	FICA Social Security Tax Payable
	FICA Medicare Tax Payable
	Employees' State Income Tax Payable
	Wages Payable
	To record payroll for the week ended February 5.

b. Prepare the general journal entry to record the employer's payroll taxes. Assume rates of 0.6 percent for federal unemployment tax and 5.4 percent for state unemployment taxbased on the first $7,000 for each employee. Also assume that no employee has earned more than $7,000. If an amount box does not require an entry, leave it blank. If required, round your intermediate calculations and final answers to the nearest cent and use the rounded answers in subsequent computations.

GENERAL JOURNAL						PAGE
DATE	DESCRIPTION	DOC. NO.		POST. REF.	DEBIT	CREDIT
20--
Feb. 5	Payroll Tax Expense
	FICA Social Security Tax Payable
	FICA Medicare Tax Payable
	State Unemployment Tax Payable
	Federal Unemployment Tax Payable
	To record employer's share of FICA taxes and employer's state and federal unemployment taxes.

Answer 1

	GENERAL JOURNAL				PAGE
DATE	DESCRIPTION	DOC. NO.	POST. REF.	DEBIT	CREDIT
20--
Feb. 5	Wages Expense			6770
	Employees' Federal Income Tax Payable				1015
	FICA Social Security Tax Payable				419.74
	FICA Medicare Tax Payable				98.17
	Employees' State Income Tax Payable				203
	Wages Payable				5034.09
	To record payroll for the week ended February 5.
GENERAL JOURNAL					PAGE
DATE	DESCRIPTION	DOC. NO.	POST. REF.	DEBIT	CREDIT
20--
Feb. 5	Payroll Tax Expense			924.11
	FICA Social Security Tax Payable				419.74
	FICA Medicare Tax Payable				98.17
	State Unemployment Tax Payable				365.58	=6770*5.4%
	Federal Unemployment Tax Payable				40.62	=6770*0.6%
	To record employer's share of FICA taxes and employer's state and federal unemployment taxes.