The following monthly data are taken from Ramirez Company at

The following monthly data are taken from Ramirez Company at July 31: Sales salaries, $200,000; Office salaries, $160,000; Federal income taxes withheld, $90,000; State income taxes withheld, $20,000; Social security taxes withheld, $22,320; Medicare taxes withheld, $5,220; Medical insurance premiums, $7,000; Life insurance premiums, $4,000; Union dues deducted, $1,000; and Salaries subject to unemployment taxes, $50,000. The employee pays 40% of medical and life insurance premiums. Assume that FICA taxes are identical to those on employees and that SUTA taxes are 5.4% and FUTA taxes are 0.6%. 1&2. Using the above information, complete the below table and Prepare the journal entries to record accrued payroll and cash payment of the net payroll for July. 3. Using the above information, complete the below table 4. Record the accrued employer payroll taxes and all other employer-paid expenses and the cash payment of all liabilities for July- assume that FICA taxes are identical to those on employees and that SUTA taxes are 5.4% and FUTA taxes are 0.6%

Solution

Date

General Journal

Debit

Credit

July 31

Payroll Tax Expenses

37140

FICA-Social Security Tax Payable

22320

FICA-Medicare Tax Payable

5220

Employee Medical Insurance Payable

4200

Employee Life Insurance Payable

2400

State Unemployment Taxes Payable

2700

Federal Unemployment Taxes Payable

300

Record the Cash Payment of Salaries of all liabilities for July

July 31

FICA-Social Security Tax Payable

44640

FICA-Medicare Tax Payable

10440

Employee Federal Income Tax Payable

90000

Employee State Income Tax Payable

20000

Employee Medical Insurance Payable

7000

Employee Life Insurance Payable

4000

Employee Union Dues Payable

1000

State Unemployment Taxes Payable

2700

Federal Unemployment Taxes Payable

300

Cash

180080

Employee Medical Insurance Payable =7000*60% = 4200 (40% is paid and 60% is payable)

Employee Life Insurance Payable = =4000*60% = 2400

State Unemployment Taxes Payable = =50000*5.4% = 2700

Federal Unemployment Taxes Payable = =50000*0.6% = 300

Date	General Journal	Debit	Credit
July 31	Payroll Tax Expenses	37140
	FICA-Social Security Tax Payable		22320
	FICA-Medicare Tax Payable		5220
	Employee Medical Insurance Payable		4200
	Employee Life Insurance Payable		2400
	State Unemployment Taxes Payable		2700
	Federal Unemployment Taxes Payable		300
Record the Cash Payment of Salaries of all liabilities for July
July 31	FICA-Social Security Tax Payable	44640
	FICA-Medicare Tax Payable	10440
	Employee Federal Income Tax Payable	90000
	Employee State Income Tax Payable	20000
	Employee Medical Insurance Payable	7000
	Employee Life Insurance Payable	4000
	Employee Union Dues Payable	1000
	State Unemployment Taxes Payable	2700
	Federal Unemployment Taxes Payable	300
	Cash		180080