Francisco Company has 10 employees, each of whom earns $2,800 per month and is paid on the last day of each month. All 10 have been employed continuously at this amount since January 1. Francisco uses a payroll bank account and special payroll checks to pay its employees. On March 1, the following accounts and balances exist in its general ledger:
a.FICA"Social Security Taxes Payable, $3,472; FICA"Medicare Taxes Payable, $812. (The balances of these accounts represent total liabilities for both the employer's and employees' FICA taxes for the February payroll only.)b. Employees' Federal Income Taxes Payable, $4,000 (liability for February only).c. Federal Unemployment Taxes Payable, $488 (liability for January and February together).d. State Unemployment Taxes Payable, $2,240 (liability for January and February together).
During March and April, the company had the following payroll transactions.Mar. 15Issued check payable to Swift Bank, a federal depository bank authorized to accept employers' payments of FICA taxes and employee income tax withholdings. The $8,284 check is in payment of the February FICA and employee income taxes.31Recorded the March payroll and transferred funds from the regular bank account to the payroll bank account. Issued checks payable to each employee in payment of the March payroll. The payroll register shows the following summary totals for the March pay period.
Salaries and Wages Office Salaries: $ 11,200Salaries Shop Salaries: $ 16,800Gross Pay : $ 28,000FICA Taxes*: $ 1,736$ 406Federal Income Taxes: $ 4,000Net Pay: $ 21,858
FICA taxes are Social Security and Medicare, respectively.31Recorded the employer's payroll taxes resulting from the March payroll. The company has a merit rating that reduces its state unemployment tax rate to 4.00% of the first $7,000 paid each employee. The federal rate is 0.80%.Apr. 15 Issued check to Swift Bank in payment of the March FICA and employee income taxes.15Issued check to the State Tax Commission for the January, February, and March state unemployment taxes.
Mailed the check and the first quarter tax return to the Commission.30Issued check payable to Swift Bank in payment of the employer's FUTA taxes for the first quarter of the year.30Mailed Form 941 to the IRS, reporting the FICA taxes and the employees' federal income tax withholdings for the first quarter.
Required:Prepare journal entries to record the transactions and events for both March and April.