A Corp. allows employees to elect to contribute 5% of their salaries to a retirement plan. The

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Question:

A Corp. allows employees to elect to contribute 5% of their salaries to a retirement plan. The company matches 40% of the amount contributed. Salaries earned during January by all employees were $48,000. Total salaries do not exceed wage bases for computing payroll taxes. The company does not contribute any portion of insurance premiums. The Social Security tax rate is 6.2%. Medicare tax rate is 1.45%. Other payroll information for January follows:

Federal withholding of $ 9000

State & Local withholding 3500

Employee retirement plan contributions 2000

Insurance premiums withheld 3500

Total unemployment tax rate 6.0%

Required:

Compute the required withholdings and record the journal entries for the January Salaries assuming the salaries and all related payments were made on January 31.