calculate fica social security taxes payable and fica medicare taxes payable prepare 647960

Palmer Company’s first weekly pay period of the year ends on January 8. On that date, the column totals in Palmer’s payroll register indicate its sales employees earned $69,490, its office employees earned $42,450, and its delivery employees earned $2,060. The employees are to have withheld from their wages FICA Social Security taxes at the rate of 6.2%, FICA Medicare taxes at the rate of 1.45%, $17,250 of federal income taxes, $2,320 of medical insurance deductions, and $275 of union dues. No employee earned more than $7,000 in the first pay period.

Required

1. Calculate FICA Social Security taxes payable and FICA Medicare taxes payable. Prepare the journal entry to record Palmer Company’s January 8 (employee) payroll expenses and liabilities.

2. Prepare the journal entry to record Palmer’s (employer) payroll taxes resulting from the January 8 payroll. Palmer’s merit rating reduces its state unemployment tax rate to 3.4% of the first $7,000 paid each employee. The federal unemployment tax rate is 0.8%.