Chap009wildtextbook

Recording employee payroll deductions dr cr jan 31

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Recording Employee Payroll Deductions DR CR Jan. 31 Salaries Expense 4,000 FICA - Social Security Tax Payable 248 FICA - Medicare Tax Payable 58 Employee Federal Income Tax Payable 420 Employee Medical Insurance Payable 48 Employee Union Dues Payable 100 Accrued Salaries Payable 3,126 To record accrued payroll for January $4,000 × 6.2% = 5248 54,000 × 1.45% = 9-22
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FICA Taxes Medicare Taxes Federal and State Unemployment Taxes Employers pay amounts equal to that withheld from the employee’s gross pay. Employer Payroll Taxes 9-23
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2010: 6.2% on the first $7,000 of wages paid to each employee (A credit up to 5.4% is given for SUTA paid, therefore the net rate is .8%.) Federal Unemployment Tax (FUTA) 2010: Basic rate of 5.4% on the first $7,000 of wages paid to each employee (Merit ratings may lower SUTA rates.) State Unemployment Tax (SUTA) Federal and State Unemployment Taxes 9-24
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The entry to record the employer payroll taxes for January might look like this: SUTA: $4,000 × 5.4% = $216 FUTA: $4,000 × (6.2% - 5.4%) = $32 FICA amounts are the same as that withheld from the employee’s gross pay. Recording Employer Payroll Taxes DR CR Jan. 31 Payroll Taxes expense 554 FICA - Social Security Tax Payable 248 FICA - Medicare Tax Payable 58 State Unemployment Taxes Payable 216 Federal Unemployement Taxes Payable 32 To record employer payroll taxes for January 9-25
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Multi-Period Known Liabilities Often include unearned revenues and notes payable. Unearned revenues from magazine subscriptions often cover more than one accounting period. A portion of the earned revenue is recognized each period and the unearned revenue account is reduced. Notes payable often extend over more than one accounting period. A three-year note payable would be classified as a current liability for one year and a long-term liability for two years. 9-26
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An estimated liability is a known obligation of an uncertain amount , but one that can be reasonably estimated . Estimated Liabilities 9-27
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Employer expenses for pensions or medical, dental, life and disability insurance Health and Pension Benefits Assume an employer agrees to pay an amount for medical insurance equal to $8,000, and contribute an additional 10% of the employees’ $120,000 gross salary to a retirement program. not responsible for entry DR CR Jan. 31 Employee Benefits Expense 20,000 Employee Medical Insurance Payable 8,000 Employee Retirement Program Payable 12,000 9-28
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Employer expenses for paid vacation by employees Vacation Benefits Assume an employee earns $62,400 per year and earns two weeks of paid vacation each year.
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