Widmer Company had gross wages of $187,000 during the week ended June 17. The amount of wages subject to social security tax was $168,300, while the amount of wages subject to federal and state unemployment taxes was $23,000. Tax rates are as follows: Social security 6%
Medicare 1.5%
State unemployment 5.4%
Federal unemployment 0.8%

The total amount withheld from employee wages for federal taxes was $48,000.

Required:
a. Journalize the entry to record the payroll for the week of June 17.
b. Journalize the entry to record the payroll tax expense incurred for the week of June 17.

a.

Date         Account Title                                                   Debit             Credit

June 17    Wages expense                                              $187,000

                Social Security tax payable                                                 $10,098

                Medicare tax payable                                                          $2,805

                 Employee Federal Income Tax payable                           $48,000

                 Wages payable                                                                  $126,097

Working

Social security = 6% * 168,300 = $10,098

Medicare = 1.5% * 187,000 = $2,805

b.

Date         Account Title                                                       Debit           Credit

June 17     Payroll Tax Expense                                       $14,329

                 Social Security tax payable                                                 $10,098

                Medicare tax payable                                                          $2,805

                State Unemployment tax payable                                       $1,242

                Federal Unemployment tax payable                                   $   184

Working

State Unemployment tax payable = 23,000 * 5.4% = $1,242

Federal Unemployment tax payable = 23,000 * 0.8% = $184

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