An electric device delivers a current of [tex]$15.0 A$[/tex] for 30 seconds. How many electrons flow through it?
Answer (1)
Calculate FICA Social Security taxes: 26 , 000 × 0.062 = $1 , 612 .
Calculate FICA Medicare taxes: 26 , 000 × 0.0145 = $377 .
Calculate total withholdings: $1 , 612 + $377 + $2 , 500 + $648 + $170 = $5 , 307 .
Calculate salaries payable: $26 , 000 − $5 , 307 = $20 , 693 .
Explanation
Understanding the Problem We are asked to prepare the journal entry to record North Company's January 15 salaries expense and related liabilities. We need to calculate each component of the journal entry, including the FICA Social Security taxes, FICA Medicare taxes, and the final salaries payable.
Calculating FICA Social Security Taxes First, we calculate the FICA Social Security taxes. The employees earned $26,000 and the FICA Social Security tax rate is 6.2%. Therefore, the FICA Social Security taxes payable is: 26 , 000 × 0.062 = $1 , 612
Calculating FICA Medicare Taxes Next, we calculate the FICA Medicare taxes. The employees earned $26,000 and the FICA Medicare tax rate is 1.45%. Therefore, the FICA Medicare taxes payable is: 26 , 000 × 0.0145 = $377
Calculating Total Withholdings Now, we need to calculate the total withholdings from the employees' salaries. This includes FICA Social Security taxes, FICA Medicare taxes, federal income taxes, medical insurance deductions, and union dues. The total withholdings are: $1 , 612 ( F I C A S oc ia lS ec u r i t y ) + $377 ( F I C A M e d i c a re ) + $2 , 500 ( F e d er a l I n co m e T a x es ) + $648 ( M e d i c a l I n s u r an ce ) + $170 ( U ni o n D u es ) = $5 , 307
Calculating Salaries Payable Finally, we calculate the salaries payable. This is the total salaries expense minus the total withholdings: $26 , 000 ( T o t a lS a l a r i es ) − $5 , 307 ( T o t a l Wi t hh o l d in g s ) = $20 , 693
Preparing the Journal Entry Now we prepare the journal entry. We debit Salaries Expense for $26,000 and credit FICA Social Security Taxes Payable for $1,612, FICA Medicare Taxes Payable for $377, Employee Federal Income Taxes Payable for $2,500, Employee Medical Insurance Payable for $648, Employee Union Dues Payable for $170, and Salaries Payable for $20,693.
Final Answer The salaries payable is $20 , 693 .
Examples
Understanding payroll taxes is crucial in personal finance and business management. For example, when starting a small business, it's important to accurately calculate and remit payroll taxes to avoid penalties. Similarly, as an employee, understanding these deductions helps in financial planning and knowing your net income. This knowledge extends to understanding government revenue sources and how social security and medicare are funded.
