On January 8, the end of the first weekly pay period of the year, Royal Company's payroll register

On January 8, the end of the first weekly pay period of the year, Royal Company's payroll register showed that its employees earned $24,760 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%, $13,260 of federal income taxes, $1,450 of medical insurance deductions, and $820 of union dues. No employee earned more than $7,000 in this first period.

  

Required:
1.1	Calculate FICA Social Security taxes payable and FICA Medicare taxes payable by the employees of Royal Company. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)

  

FICA—Social sec. taxes payable	$
FICA—Medicare taxes payable	$

  

1.2	Prepare the journal entry to record Royal Company's January 8 (employee) payroll expenses and liabilities. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)

  

Date	General Journal	Debit	Credit
Jan. 8	Office salaries expense
	Sales salaries expense
	FICA-Social sec. taxes payable
	FICA-Medicare taxes payable
	Employee fed. inc. taxes payable
	Employee medical insurance payable
	Employee union dues payable
	Salaries payable

  

2.

Prepare the journal entry to record Royal's (employer) payroll taxes resulting from the January 8 payroll. Royal's merit rating reduces its state unemployment tax rate to 5% of the first $7,000 paid each employee. The federal unemployment tax rate is 0.8%. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)

Date	General Journal	Debit	Credit
Jan. 8	Payroll taxes expense
	FICA-Social sec. taxes payable
	FICA-Medicare taxes payable
	State unemployment taxes payable
	Federal unemployment taxes payable

Explanation:

1.2

To record payroll for period.

FICA—Social sec. taxes payable = $85,600 × 6.2% = $5,307.20

FICA—Medicare taxes payable = $85,600 × 1.45% = $1,241.20

  

2

To record employer payroll taxes.

State unemployment taxes payable = $85,600 × 0.05 = $4,280.00

Federal unemployment taxes payable = $85,600 × 0.008 = $684.80