Widmer Company had gross wages of $310,000 during the week ended June 17. The amount of wages subject to social security tax was $310,000, while the amount of wages subject to federal and state unemployment taxes was $35,000. Tax rates are as follows: Social security 6.0% Medicare 1.5% State unemployment 5.4% Federal unemployment 0.8% The total amount withheld from employee wages for federal taxes was $47,000. Journalize the entry to record the payroll for the week of June 17.* Refer to the Chart of Accounts for exact wording of account titles. Journalize the entry to record the payroll tax expense incurred for the week of June 17. Refer to the Chart of Accounts for exact wording of account titles.

Answer and Explanation:

                                               Widmer Company

                                                 Journal Entries

                                           For the week of June 17

                                                                              Debit                    Credit

Wages expense                                                   $310,000

    FICA social security tax (6% x $310,000)                                  $18,600

    FICA medicare tax (1.5% x $310,000)                                        $4,650

    Federal income tax                                                                     $47,000

    Wages payable (balancing figure)                                             $239,750

Recording of employee payroll.

Payroll tax expense                                              $25,420

    FICA social security tax payable                                               $18,600

    FICA medicare tax payable                                                       $4,650

    FUTA payable (0.8% x $35,000)                                               $280

    SUTA payable (5.4% x $35,000)                                               $1,890

Recording of payroll taxes

answer; i believe the correct answer is (business necessity defense;

answer; (b) insider trading;