Marc & Associates employs Janet Evanovich at its law firm and June is the first pay period for Janet. Her gross income for June is $7,500. FUTA taxes are 0.6% and SUTA taxes are 5.4% of the first $7,000 paid to the employee. Payroll for the month of June follows: FICA Social Security tax rate at 6.2%, FICA Medicare tax rate at 1.45%, federal income tax of $650, state income tax of $60, local income tax of $30, health-care insurance premium of $300, pension plan contribution of $200, and donations to a charity of $50. The employee is responsible for covering 40% of her health insurance premium. The employer is responsible for 60% of the health insurance premium. The employer matches 50% of employee pension plan contributions. Cash Health Insurance Payable Union Dues Payable Benefits Expense State Unemployment Tax Payable Federal Unemployment Tax Payable Salaries Expense FICA Medicare Tax Payable Federal Income Tax Payable 401(k) Retirement Plan Payable Employer Payroll Taxes Expense Vacation Benefit Payable Local Income Tax Payable Pension Plan Payable Donations Payable Salaries Payable State Income Tax Payable FICA Social Security Tax Payable Record the journal entry to recognize employee payroll for the month of June; dated June 30, 2017. DR CR CR CR CR CR CR CR CR CR Record remittance of the employee’s salary with cash on July 1. DR CR Record the two journal entries for the employer payroll for the month of June, dated June 30, 2017. DR CR CR CR CR DR CR CR Record the two journal entries for the payment in cash of all employer liabilities only on July 1. DR DR DR DR DR DR DR CR DR DR DR CR

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 14EA: Toren Inc. employs one person to run its solar management company. The employees gross income for...

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Marc & Associates employs Janet Evanovich at its law firm and June is the first pay period for Janet.

Her gross income for June is $7,500.

FUTA taxes are 0.6% and SUTA taxes are 5.4% of the first $7,000 paid to the employee.

Payroll for the month of June follows: FICA Social Security tax rate at 6.2%, FICA Medicare tax rate at 1.45%, federal income tax of $650, state income tax of $60, local income tax of $30, health-care insurance premium of $300, pension plan contribution of $200, and donations to a charity of $50.

The employee is responsible for covering 40% of her health insurance premium. The employer is responsible for 60% of the health insurance premium.

The employer matches 50% of employee pension plan contributions.

Cash	Health Insurance Payable	Union Dues Payable
Benefits Expense	State Unemployment Tax Payable	Federal Unemployment Tax Payable
Salaries Expense	FICA Medicare Tax Payable	Federal Income Tax Payable
401(k) Retirement Plan Payable	Employer Payroll Taxes Expense	Vacation Benefit Payable
Local Income Tax Payable	Pension Plan Payable	Donations Payable
Salaries Payable	State Income Tax Payable	FICA Social Security Tax Payable

Record the journal entry to recognize employee payroll for the month of June; dated June 30, 2017.
DR

CR

CR

CR

CR

CR

CR

CR

CR

CR
Record remittance of the employee’s salary with cash on July 1.
DR

CR
Record the two journal entries for the employer payroll for the month of June, dated June 30, 2017.
DR

CR

CR

CR

CR
DR

CR

CR
Record the two journal entries for the payment in cash of all employer liabilities only on July 1.

DR

DR

DR

DR

DR

DR

DR

CR
DR

DR

DR

CR

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