Here is what I have for this problem and I was wondering if someone could tell me if this is correct and I was not sure what to do with the hospital insurance premiums (so I was wondering if anyone could shed some light on this).
1) Prepare the entry to record the gross payroll.
Salaries and wages expense 140,000
Salaries and wages payable 140,000
2) Prepare the entry to record the employer payroll taxes.
Salaries expense 78,000
FICA taxes payable 5,850
Employees income taxes payable 33,000
Cash 39,150
Payroll tax expense 6,858
FICA taxes payable 5,850
State unemployment taxes payable 720
Federal unemployment taxes payable 288
computations:
FICA - .075 x 78,000 = 5,850
State unemployment - .020 x 36,000 = 720
Federal unemployment - .008 x 36,000 = 288
Here is the data for the problem that I used...
Employees of Harding Fabricators, Inc. earned gross wages of $140,000 during a recent two-week period. Employee withholdings and payroll tax percentages are presented below:
Federal withholding... $33,000
Hospital insurance premiums... 3,050
FICA... 7.5%
State unemployment... 2.0%
Federal unemployment... 0.8%
Only $78,000 of wages are subject to FICA, and $36,000 are subject to unemployment taxes.