For the year ended December 31, 2011, Niehaus Electrical Repair Company reports the following summary payroll data.
|
Gross earnings: |
|
|
Administrative salaries |
$180,000 |
|
Electricians’ wages |
370,000 |
|
Total |
$550,000 |
|
Deductions: |
|
|
FICA taxes |
$ 38,000 |
|
Federal income taxes withheld |
168,000 |
|
State income taxes withheld (2.6%) |
14,300 |
|
United Way contributions payable |
27,500 |
|
Hospital insurance premiums |
17,200 |
|
Total |
$265,000 |
Niehaus 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 $475,000, and unemployment taxes total $125,000.
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 |
|
Other Compensation |
Tax Withheld |
Tax Withheld |
Wages |
Tax Withheld |
Complete the required data for the following employees.
|
Employee |
Gross Earnings |
Federal Income Tax Withheld |
|
Anna Hashmi |
$59,000 |
$28,500 |
|
Sharon Bishop |
26,000 |
10,200 |