Widmer Company had gross wages of $194,000 during the week ended June 17. The amount of wages subject to social security tax was $174,600, while the amount of wages subject to federal and state unemployment taxes was $24,000. Tax rates are as follows: Social security 6.0%
Medicare 1.5%
State unemployment 5.4%
Federal unemployment 0.8%

The total amount withheld from employee wages for federal taxes was $38,800. If an amount box does not require an entry, leave it blank. If required, round answers to two decimal places.

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. See the journal entries below.

b. See the journal entries below.

Explanation:

a. Journalize the entry to record the payroll for the week of June 17.

The journal entries will look as follows:

Date         Accounts                                                    Debit ($)       Credit ($)

June 17    Wages Expense                                          194,000  

                Social sec. tax payable ($194,000 * 6%)                           11,640

                Medicare tax payable ($194,000 * 1.5%)                            2,910

                Employees Federal income tax payable                        38,800

                Wages Payable (Balancing figure)                                 140,650

                (To record payroll for the week)                                                    

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

The journal entries will look as follows:

Date         Accounts                                                    Debit ($)       Credit ($)

June 17     Payroll Tax Expense                                   16,038

                Social sec. tax payable ($194,000 * 6%)                           11,640

                Medicare tax payable ($194,000 * 1.5%)                            2,910

                State unemp. taxes paybl. ($24,000 * 5.4%)                     1,296

                Fed. unemp. taxes paybl. ($24,000 * 0.8%)                         192

                (To record payroll taxes for the week)                                          

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