For the year ended December 31, 2012, Telmarine Electrical Repair Company
For the year ended December 31, 2012, Telmarine Electrical Repair Company reports the following summary payroll data.
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Gross earnings: |
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Administrative salaries |
$208,900 |
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Electricians’ wages |
373,000 |
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Total |
$581,900 |
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Deductions: |
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FICA taxes |
$39,610 |
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Federal income taxes withheld |
178,041 |
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State income taxes withheld (3%) |
17,457 |
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United Fund contributions payable |
28,074 |
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Health insurance premiums |
17,559 |
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Total |
$280,741 |
Telmarine Company’s payroll taxes are: FICA 8%, state
unemployment 2.50% (due to a stable employment record), and 0.80%
federal unemployment. Gross earnings subject to FICA taxes total $495,125, and
gross earnings subject to unemployment taxes total $137,818.
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(a) |
Prepare a summary journal entry at December 31 for the full year’s payroll. |
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(b) |
Journalize the adjusting entry at December 31 to record the employer’s payroll taxes. |
(Round answers to 0 decimal places, e.g. 125. Credit account titles
are automatically indented when amount is entered. Do not indent manually.)
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Rating:
/5
Solution: Telmarine Electrical Repair Company