Alamar Petroleum Company offers its employees the option of contributing retirement funds up to 5%...
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Accounting
Alamar Petroleum Company offers its employees the option of contributing retirement funds up to 5% of their wages or salaries, with the contribution being matched by Alamar. The company also pays 85% of medical and life insurance premiums. Deductions relating to these plans and other payroll information for the first biweekly payroll period of February are listed as follows:
Wages and salaries
$
2,900,000
Employee contribution to voluntary retirement plan
93,000
Medical insurance premiums
51,000
Life insurance premiums
9,900
Federal income taxes to be withheld
490,000
Local income taxes to be withheld
62,000
Payroll taxes:
Federal unemployment tax rate
0.60
%
State unemployment tax rate (after FUTA deduction)
5.40
%
Social Security tax rate
6.20
%
Medicare tax rate
1.45
%
Required: Prepare the appropriate journal entries to record salaries and wages expense and payroll tax expense for the biweekly pay period. Assume that all employees cumulative wages do not exceed the relevant wage bases for Social Security, FUTA or SUTA. Salaries are not yet paid. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
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