On January 31 Dewey Inc pays its one employee a check for th

On January 31, Dewey Inc. pays its one employee a check for the months wages. The employee has earned $4,000. The federal income tax withholding for this paycheck is $600, the state income tax withholding is $200, the social security withholding is 6.2% and the Medicare withholding is 1.45%. What journal entry should the company make on January 31 to record the cash payment to the employee and the withholdings? Dr Cr Cr Cr Cr Cr

Solution

b)

Date	Account	Debit	credit
	salary expense	4000
	Federal Income tax payable		600
	State Income tax payable		200
	Social security witholding tax payable [4000*6.2%]		248
	medicare tax payable [4000*1.45%]		58
	salary payable		2894
2	Payroll tax expense	554
	Social security witholding tax payable		248
	medicare tax payable		58
	federal unemployment tax payable [4000*.008]		32
	State unemployment tax payable [4000*.054]		216