Question

Instructions Chart of Accounts Journal Instructions The payroll register for Gamble Company for the week ended April 29 indicated the following: Salaries Social security tax withheld $1,440,000 86,400 21.600 Medicare tax withheld Federal income tax withheld 288,000 In addition, state and federal unemployment taxes were calculated at the rate of 5,4% and 0.8%, respectively, on $24,000 of salaries Required: A. Journalize the entry to record the payroll for the week of April 29 B. Journalize the entry to record the payrol Max expense incurred for the week of April 29, *Refer to the Chart of Accounts for exact wording of account titles

Answer 1

JOURNAL	ACCOUNTING EQUATION
DATE	DESCRIPTION	POST REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
Apr-29	Salaries Expense	520	1,440,000.00		-	-	(1,440,000.00)
	Social Security Tax Payable	216		86,400.00	-	86,400.00
	Medicare Tax Payable	217		21,600.00	-	21,600.00
	Employees Federal Income Tax Payable	218		288,000.00	-	288,000.00
	Federal Unemployment Tax Payable	224		1,464.00	-	1,464.00
	State Unemployment Tax Payable	225		13,176.00	-	13,176.00
	Salaries Payable	215		1,029,360.00	-	1,029,360.00
	(to record the payroll expenses for the week ended April 29)
Apr-29	Payroll Tax Expense	535	122,640.00		-	-	(122,640.00)
	Social Security Tax Payable	216		86,400.00	-	86,400.00
	Medicare Tax Payable	217		21,600.00	-	21,600.00
	Federal Unemployment Tax Payable	224		1,464.00	-	1,464.00
	State Unemployment Tax Payable	225		13,176.00	-	13,176.00
	(to record the employer's share of payroll taxes payable)	-	1,562,640.00	(1,562,640.00)
Working Notes
Computation of State and Federal unemployment taxes
	Basic Salary	State Unemployment Tax @ 5.40%	Federal Unemployment Tax @ 0.60%
Basic Salary & Unemployment Tax	244,000.00	13,176.00	1,464.00
Payroll tax expense means the employer's share of payroll taxes.Employer portion of the payroll taxes includes the following
(i) Social Security Tax
(ii) Medicare Tax
(iii) Federal Unemployment Tax
(iv) State Unemployment Tax
The employer contributes an amount equal to the employees' contribution for the above mentioned payroll taxes.