For the year ended December 31, 2012, Bradburn Electrical Repair Company reports the following summary payroll data.
|
Gross earnings: |
|
|
Administrative salaries |
$180,000 |
|
Electricians’ wages |
470,000 |
|
Total |
$650,000 |
|
Deductions: |
|
|
FICA taxes |
$45,200 |
|
Federal income taxes withheld |
188,000 |
|
State income taxes withheld (2.6%) |
16,900 |
|
United Fund contributions payable |
32,500 |
|
Hospital insurance premiums |
20,300 |
|
Total |
$302,900 |
Bradburn Company’s payroll taxes are: FICA 8%, state unemployment 2.5% (due to a stable employment record), and 0.8% federal unemployment. Gross earnings subject to FICA taxes total $565,000, and gross earnings subject to unemployment taxes total $145,000.
Instructions
(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.
|
Wages, Tips, |
Federal Income |
State Income |
FICA |
FICA Tax |
Complete the required data for the following employees.
|
Employee |
Gross Earnings |
Federal Income Tax Withheld |
|
Anna Hillman |
$59,000 |
$28,500 |
|
Sharon Wainwright |
28,000 |
10,800 |