Reference no: EM131760795

Question - On January 8, the end of the first weekly pay period of the year, Regis Company's payroll register showed that its employees earned $26,760 of office salaries and $60,840 of sales salaries. Withholdings from the employees' salaries include FICA Social Security taxes at the rate of 6.20%, FICA Medicare taxes at the rate of 1.45%, $12,960 of federal income taxes, $1,400 of medical insurance deductions, and $900 of union dues. No employee earned more than $7,000 in this first period.

Required:

1.1. Calculate below the amounts for each of these four taxes of Regis Company. Regis's merit rating reduces its state unemployment tax rate to 3% of the first $7,000 paid each employee. The federal unemployment tax rate is 0.60%.

Regis Company's:
Tax	January 8 earnings subjects to tax	Tax Rate	Tax Amount
FICA-Social Security	$87,600	6.20%	5,431.20
FICA-Medicare	87,600	1.45%	1,270.20
FUTA	87,600	0.60%	525.60
SUTA	87,600	3.00%	2,628.00

1.2. Prepare the journal entry to record Regis Company's January 6 (employee) payroll expenses and inabilities.

2. Prepare the journal entry to record Regis's (employer) payroll taxes resulting from the January 8 payroll. Regis's merit rating reduces its state unemployment lax rate to 3% of the first $7,000 paid each employee. The federal unemployment tax rate is 0.50%.