Problem-16: Current Liabilities and Payroll Accounting

Ramirez Company has the following data for the weekly payroll ending January 31.

Employees are paid 1 1/2 times the regular hourly rate for all hours worked in excess of 40 hours per week. FICA taxes are 7.65% on the first $117,000 of gross earnings. Ramirez company is subject to 5.4% state unemployment taxes and 0.8% federal unemployment taxes on the first $7,000 of gross earnings.

Instructions

1. Prepare the payroll register for the weekly payroll.
2. Prepare the journal entries to record the payroll and Reamirez's payroll tax expense.

Solution