The following summary data for the payroll period ended December 27, 2021, are available for Cayman Coating Company: Gross pay FICA tax withholdings Income tax withholdings $ 93,000 ? 15,480 Employee contributions to pension plan Total deductions 1,650 ? 25,455 Net pay ? Group hospitalization insurance Additional information: • For employees, FICA tax rates for 2021 were 7.65% on the first $142,800 of each employee's annual earnings. However, no employees had accumulated earnings for the year in excess of the $142,800 limit. • For employers, FICA tax rates for 2021 were also 7.65% on the first $142,800 of each employee's annual earnings. • The federal and state unemployment compensation tax rates are 0.6% and 5.4%, respectively. These rates are levied against the employer for the first $7,000 of each employee's annual earnings. Only $15,600 of the gross pay amount for the December 27, 2021, pay period was owed to employees who were still under the annual limit. b-2. Assuming that Cayman Coating Company's payroll for the last week of the year is to be paid on January 3, 2022, record the journal entry to show the effects of the December 27, 2021, entries for Accrued payroll taxes. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
The following summary data for the payroll period ended December 27, 2021, are available for Cayman Coating Company: Gross pay FICA tax withholdings Income tax withholdings $ 93,000 ? 15,480 Employee contributions to pension plan Total deductions 1,650 ? 25,455 Net pay ? Group hospitalization insurance Additional information: • For employees, FICA tax rates for 2021 were 7.65% on the first $142,800 of each employee's annual earnings. However, no employees had accumulated earnings for the year in excess of the $142,800 limit. • For employers, FICA tax rates for 2021 were also 7.65% on the first $142,800 of each employee's annual earnings. • The federal and state unemployment compensation tax rates are 0.6% and 5.4%, respectively. These rates are levied against the employer for the first $7,000 of each employee's annual earnings. Only $15,600 of the gross pay amount for the December 27, 2021, pay period was owed to employees who were still under the annual limit. b-2. Assuming that Cayman Coating Company's payroll for the last week of the year is to be paid on January 3, 2022, record the journal entry to show the effects of the December 27, 2021, entries for Accrued payroll taxes. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
College Accounting (Book Only): A Career Approach
13th Edition
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:Scott, Cathy J.
Chapter8: Employer Taxes, Payments, And Reports
Section: Chapter Questions
Problem 4E
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Transcribed Image Text:The following summary data for the payroll period ended December 27, 2021, are available for Cayman Coating Company:
Gross pay
FICA tax withholdings
Income tax withholdings
Group hospitalization insurance
Employee contributions to pension plan
Total deductions
Net pay
$ 93,000
?
15,480
1,650
?
25,455
?
Additional information:
• For employees, FICA tax rates for 2021 were 7.65% on the first $142,800 of each employee's annual earnings. However,
no employees had accumulated earnings for the year in excess of the $142,800 limit.
• For employers, FICA tax rates for 2021 were also 7.65% on the first $142,800 of each employee's annual earnings.
• The federal and state unemployment compensation tax rates are 0.6% and 5.4%, respectively. These rates are levied
against the employer for the first $7,000 of each employee's annual earnings. Only $15,600 of the gross pay amount for
the December 27, 2021, pay period was owed to employees who were still under the annual limit.
b-2. Assuming that Cayman Coating Company's payroll for the last week of the year is to be paid on January 3, 2022, record the
journal entry to show the effects of the December 27, 2021, entries for Accrued payroll taxes.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.
View transaction list
Journal entry worksheet
Record the accrued payroll taxes.
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