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14 June, 10:34

On January 15, the end of the first biweekly pay period of the year, North Company's payroll register showed that its employees earned $35,000 of sales salaries. Withholdings from the employees' salaries include FICA Social Security taxes at the rate of 6.2%, FICA Medicare taxes at the rate of 1.45%, $6,500 of federal income taxes, $772.50 of medical insurance deductions, and $120 of union dues. No employee earned more than $7,000 in this first period. Prepare the journal entry to record North Company's January 15.

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  1. 14 June, 13:34
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    The Journal entry is as follows:

    Sales salary expense A/c Dr. $35,000

    To FICA social security tax $2,170

    To FICA medicare tax $507.50

    To federal income tax $6,500

    To medical insurance deduction $772.50

    To union dues $120

    To sales salaries payable $24,930

    (To record the employee payroll for the period)

    Notes:

    FICA social security tax = $35,000 * 6.2%

    = $2,170

    FICA medicare tax = $35,000 * 1.45%

    = $507.50
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