A Corp. allows employees to elect to contribute 5% of their salaries to a retirement plan. The
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.
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill