Problem - For the year ended December 31, 2012, Telmarine Electrical Repair Company reports the following summary payroll data.
|
Gross earnings:
|
|
|
Administrative salaries
|
$208,900
|
|
Electricians' wages
|
373,000
|
|
Total
|
$581,900
|
|
Deductions:
|
|
|
FICA taxes
|
$39,610
|
|
Federal income taxes withheld
|
178,041
|
|
State income taxes withheld (3%)
|
17,457
|
|
United Fund contributions payable
|
28,074
|
|
Health insurance premiums
|
17,559
|
|
Total
|
$280,741
|
Telmarine Company's payroll taxes are: FICA 8%, state unemployment 2.50% (due to a stable employment record), and 0.80% federal unemployment. Gross earnings subject to FICA taxes total $495,125, and gross earnings subject to unemployment taxes total $137,818.
(a) Prepare a summary journal entry at December 31 for the full year's payroll.
(b) Journalize the adjusting entry at December 31 to record the employer's payroll taxes.
(c) The W-2 Wage and Tax Statement requires the following dollar data. Complete the required data for the following employees.
|
Employee
|
Wages, Tips, Other Compensation
|
Federal Income Tax Withheld
|
State Income Tax Withheld
|
FICA Wages
|
FICA Tax Withheld
|
|
Lucie Solarova
|
$63,000
|
$30,432
|
|
|
|
|
Kristina Madericova
|
32,600
|
12,789
|
|
|
|