32
Diane Lane earns a salary of $9,500 per month during the year. FICA taxes are 7.65% on the first $117,000 of gross earnings. Federal unemployment insurance taxes are 6.2% of the first $7,000; however, a credit is allowed equal to the state unemployment insurance taxes of 5.4% on the $7,000. During the year, $32,300 was withheld for federal income taxes and $6,700 was withheld for state income taxes.
Instructions
(a) Prepare a journal entry summarizing the payment of Lane's total salary during the year.
(b) Prepare a journal entry summarizing the employer payroll tax expense on Lane's salary for the year.
(c) Determine the cost of employing Lane for the year.

Question

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The Answer of 32
Diane Lane earns a salary of $9,500 per month during the year. FICA taxes are 7.65% on the first $117,000 of gross earnings. Federal unemployment insurance taxes are 6.2% of the first $7,000; however, a credit is allowed equal to the state unemployment insurance taxes of 5.4% on the $7,000. During the year, $32,300 was withheld for federal income taxes and $6,700 was withheld for state income taxes.
Instructions
(a) Prepare a journal entry summarizing the payment of Lane's total salary during the year.
(b) Prepare a journal entry summarizing the employer payroll tax expense on Lane's salary for the year.
(c) Determine the cost of employing Lane for the year.

32 Diane Lane Earns a Salary of $9,500 Per Month During