John, an employee of Smith Electric, Inc., has gross salary for March of $4,000. The entire amount is under the OASDI limit of $118,500 and thus subject to FICA. He is also subject to federal income tax at a rate of 18%. John has a deduction of $320 for health insurance and $80 for United Way. Provide the journal entry to record salaries expense and payroll withholdings. (Assume a FICA-OASDI Tax of 6.2% and FICA-Medicare Tax of 1.45%.) Salaries will be paid at a later date. Omit explanation.
What will be an ideal response?
Salaries Expense 4,000
Employee Income Taxes Payable ($4,000 × 18%) 720
FICA-OASDI Taxes Payable ($4,000 × 6.20%) 248
FICA-Medicare Taxes Payable ($4,000 × 1.45%) 58
Employee Health Insurance Payable 320
United Way Payable 80
Salaries Payable ($4,000 - $720 - $248 - $58 - $320 - $80) 2,574
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