Question -
Spirit Corporation reported the following payroll-related costs for the month of February.
Gross pay (wages expense)$260,000
Social Security and Medicare taxes 19,890
Federal and state unemployment taxes 15,500
Workers' compensation insurance 8,100
Group health and life insurance benefits 11,000
Employee pension plan benefits 23,200
Total payroll costs for February$337,690
Spirit's insurance premiums for workers' compensation and group health and life insurance were paid for in a prior period and recorded initially as prepaid insurance expense. Withholdings from employee wages in February were as follows.
State income tax withholdings$5,875 Federal income tax withholdings 56,000 Social Security and Medicare tax withholdings 19,890
a. Record Spirit's payroll entries for the month of February.
b. Do the amounts withheld from Spirit's employees represent taxes levied on Spirit Corporation?