Question - On January 8, the end of the first weekly pay period of the year, Regis Company's payroll register showed that its employees earned $26,760 of office salaries and $60,840 of sales salaries. Withholdings from the employees' salaries include FICA Social Security taxes at the rate of 6.20%, FICA Medicare taxes at the rate of 1.45%, $12,960 of federal income taxes, $1,400 of medical insurance deductions, and $900 of union dues. No employee earned more than $7,000 in this first period.
Required:
1.1. Calculate below the amounts for each of these four taxes of Regis Company. Regis's merit rating reduces its state unemployment tax rate to 3% of the first $7,000 paid each employee. The federal unemployment tax rate is 0.60%.
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Regis Company's:
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Tax
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January 8 earnings subjects to tax
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Tax Rate
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Tax Amount
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FICA-Social Security
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$87,600
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6.20%
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5,431.20
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FICA-Medicare
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87,600
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1.45%
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1,270.20
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FUTA
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87,600
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0.60%
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525.60
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SUTA
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87,600
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3.00%
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2,628.00
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1.2. Prepare the journal entry to record Regis Company's January 6 (employee) payroll expenses and inabilities.
2. Prepare the journal entry to record Regis's (employer) payroll taxes resulting from the January 8 payroll. Regis's merit rating reduces its state unemployment lax rate to 3% of the first $7,000 paid each employee. The federal unemployment tax rate is 0.50%.