Problem - For the year ended December 31, 2017, Denkinger Electrical Repair Company reports the following summary payroll data.
Gross earnings:
Administrative salaries -$203,000
Electricians' wages - 376,500
Total - $579,500
Deductions:
FICA taxes - $39,186
Federal income taxes withheld - 165,000
State income taxes withheld (3%) - 17,385
United Fund contributions payable - 27,958
Health insurance premiums - 18,500
Total - $268,029
Denkinger Company's payroll taxes are Social Security tax 6.2%, Medicare tax 1.45%, state unemployment 2.S% (due to a stable employment record), and 0.8% federal unemployment. Gross earnings subje to Social Security taxes of 6.2% total $496,500, and gross earnings subject to unemployment taxes total $144,000.
(a) Prepare a summary journal entry at December 31 for the full year's payroll.
(b) Journalize the adjusting entry at December 31 to record the employer's payroll taxes.