3 Peter Phillips works for Ramirez Company all year and earn

3. Peter Phillips works for Ramirez Company all year and earns a monthly salary of $5,000. There is no overtime pay Based on Peter\'s W 4 Peter had $35,000 of cumulative earnings Ramirez withholds income taxes at 20% of his gross pay. As of July 31, (Click the icon to view payroll tax rate information.) Joumalize the accrual of salary expense for Ramirez Company related to the employment of Peter Phillips for the month of August. (Record debits first, then credits. Round all amounts to the nearest cent. Select the explanation on the last ine of the journal entry table.) Debit Crd More Into Date Accounts and Explanation More Info Salaries Expense Employee Income Taxes Payable FICA-OASDI Taxes Payable FICA-Medicare Taxes Payable Salaries Payable 5000 1000 For all payroll calculations, use the following tax rates and round amounts to the nearest cent: Employee: OASDI: 6.2% on first $118,500 earned; Medicare: 1.45% up to Employer: OASDI: 6.2% on first $118,500 earned: Medicare: 1.45%; FUTA: $200,000, 2.35% on earnings above $200,000. 0.6% on first $7,000 eared; SUTA: 5.4% on first $7,000 earned. To record salaries expense and payroll withholdings. Print Done

Solution

Journal entries Accounts title and explanations Debit $ Credit $ Salaries expense Account Dr. 5000      Employees Income Tax payable (5000*20%) 1000      FICA-OASDI Tax payable (5000*6.20%) 310      FICA-Medicare taxes payable (5000*1.45%) 72.5      Salaries payable 3617.5 Payroll Tax expense Account Dr. 382.5       FICA-OASDI Tax payable (5000*6.20%) 310       FICA-Medicare tax payable (5000*1.45%) 72.5