Reference no: EM131928457

Problem - For the year ended December 31, 2012, Telmarine Electrical Repair Company reports the following summary payroll data.

Gross earnings:
Administrative salaries	$208,900
Electricians' wages	373,000
Total	$581,900
Deductions:
FICA taxes	$39,610
Federal income taxes withheld	178,041
State income taxes withheld (3%)	17,457
United Fund contributions payable	28,074
Health insurance premiums	17,559
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.

(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. Complete the required data for the following employees.

Employee	Wages, Tips, Other Compensation	Federal Income Tax Withheld	State Income Tax Withheld	FICA Wages	FICA Tax Withheld
Lucie Solarova	$63,000	$30,432
Kristina Madericova	32,600	12,789