Question

exercise 9-10 (algo) recording payroll lo p2, p34the following monthly data are taken from ramirez company at july 31: sales salaries, $460,000; office salaries, $92,000; federal income taxes withheld, $138,000; state income taxes withheld, $31,000; social security taxes withheld, $34,224; medicare taxes withheld, $8,004; medical insurance premiums, $11,000; life insurance premiums, $8,000; union dues deducted, $5,000; and salaries subject to unemployment taxes, $58,000. the employee pays 40% of medical and life insurance premiums. assume that fica taxes are identical to those on employees and that suta taxes are 5.4% and futa taxes are 0.6%.complete this question by entering your answers in the tabs below.required 1 required 2 required 3record the accrued employer payroll taxes and other related employment expenses and the cash payment of all liabilities related to the july payroll-assume that federal insurance contributions act (fica) taxes are identical to those on employees and that state unemployment taxes (suta) are 5.4% and federal unemployment taxes (futa) are 0.6%.view transaction listjournal entry worksheetrecord the cash payment of all liabilities related to the july payroll.note: enter debits before credits.date general journal debit creditjuly 31record entry clear view general journal

Explanation:

Step1: Calculate total gross salaries

$\text{Total Gross Salaries} = \$460,000 + \$92,000 = \$552,000$

Step2: Calculate employee-paid insurance premiums

Employee pays 40% of medical ($\$11,000$) and life ($\$8,000$) insurance:
$\text{Employee Insurance} = 0.4 \times (\$11,000 + \$8,000) = 0.4 \times \$19,000 = \$7,600$

Step3: Calculate net pay (cash to employees)

$\text{Net Pay} = \text{Gross Salaries} - \text{Federal Income Tax} - \text{State Income Tax} - \text{Social Security Tax} - \text{Medicare Tax} - \text{Employee Insurance} - \text{Union Dues}$
$\text{Net Pay} = \$552,000 - \$138,000 - \$31,000 - \$34,224 - \$8,004 - \$7,600 - \$5,000 = \$328,172$

Step4: Calculate employer payroll taxes

• FICA (match employee amounts): $\$34,224 + \$8,004 = \$42,228$
• SUTA: $0.054 \times \$58,000 = \$3,132$
• FUTA: $0.006 \times \$58,000 = \$348$

$\text{Total Employer Taxes} = \$42,228 + \$3,132 + \$348 = \$45,708$

Step5: Calculate employer-paid insurance premiums

Employer pays 60% of insurance:
$\text{Employer Insurance} = 0.6 \times (\$11,000 + \$8,000) = 0.6 \times \$19,000 = \$11,400$

Step6: Sum all liabilities to pay

Total liabilities = $\text{Federal Income Tax} + \text{State Income Tax} + \text{Total FICA} + \text{Total Insurance} + \text{Union Dues} + \text{SUTA} + \text{FUTA}$
$\text{Total Liabilities} = \$138,000 + \$31,000 + (\$34,224+\$34,224) + \$19,000 + \$5,000 + \$3,132 + \$348 = \$265,928$

Answer:

Journal Entry for Cash Payment of Liabilities (July 31):

Date	General Journal	Debit	Credit
July 31	State Income Taxes Payable	$31,000
July 31	FICA - Social Security Taxes Payable	$34,224
July 31	FICA - Medicare Taxes Payable	$8,004
July 31	Employee Medical Insurance Payable	$4,400
July 31	Employee Life Insurance Payable	$3,200
July 31	Employer Medical Insurance Payable	$6,600
July 31	Employer Life Insurance Payable	$4,800
July 31	Union Dues Payable	$5,000
July 31	SUTA Taxes Payable	$3,132
July 31	FUTA Taxes Payable	$348
July 31	Cash		$265,928

(Note: The employee-paid portion of insurance is $\$4,400$ (40% of $\$11,000$) for medical and $\$3,200$ (40% of $\$8,000$) for life; employer-paid is $\$6,600$ and $\$4,800$ respectively, summing to the total $\$19,000$ insurance premiums.)