Response to the following problem:
Kovarik Company had the following payroll for the week ended March 21:
Salaries Deductions
Sales salaries $7,620.00 Federal income tax withheld $1,094.00
Office salaries 1,790.00 Social Security tax withheld 395.22
Total $9,410.00 Medicare tax withheld 136.45
Charity withheld 153.00
Total $1,778.67
Assumed tax rates are as follows:
a. FICA: Social Security (employer) 6.2 percent (0.062) and (employee) 4.2 percent (0.042) on the first $106,800 for each employee and Medicare, 1.45 percent (0.0145) on all earnings for each employee.
b. State unemployment tax, 5.4 percent (0.054) on the first $7,000 for each employee.
c. Federal unemployment tax, 0.6 percent (0.006) on the first $7,000 for each employee.
Required:
Record the following entries in general journal form:
1. The payroll entry as of March 21.
2. The entry to record the employer's payroll taxes as of March 21 assuming that the total payroll is subject to the FICA taxes (combined Social Security and Medicare) and that $4,965 is subject to unemployment taxes.
3. The payment of the employees on March 23. (Assume that the company has transferred cash to Cash-Payroll Bank Account for this payroll.)