For the year ended December 31, 2010, Blasing Electrical Repair Company reports the following summary payroll data.

Blasing Company’s payroll taxes are: FICA 8%, state unemployment 2.5% (due to a stable employment record), and 0.8% federal unemployment. Gross earnings subject to FICA taxes total $485,000, and gross earnings subject to unemployment taxes total $135,000.

Instructions

(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.

(c) The W-2 Wage and Tax Statement requires the following dollar data.

Gross earnings: $200,000 370,000 Administrative salaries Electricians' wages $570,000 Total Deductions: $ 38,800 174,400 17,100 FICA taxes Federal income taxes withheld State income taxes withheld (3%) United Fund contributions payable Hospital insurance premiums 27,500 17,200 $275,000 Total