Question

In the following summary of data for a payroll period, some amounts have been intentionally omitted:

Earnings:
	1. At regular rate	?
	2. At overtime rate	$52,900
	3. Total earnings	?
Deductions:
	4. Social security tax	21,180
	5. Medicare tax	5,295
	6. Income tax withheld	89,900
	7. Medical insurance	12,200
	8. Union dues	?
	9. Total deductions	131,000
	10. Net amount paid	222,000
Accounts debited:
	11. Factory Wages	187,100
	12. Sales Salaries	?
	13. Office Salaries	70,600

a. Calculate the amounts omitted in lines (1), (3), (8), and (12).

(1)	$
(3)	$
(8)	$
(12)	$

b. Journalize the entry to record the payroll accrual. If an amount box does not require an entry, leave it blank.

Factory Wages Expense
Sales Salaries Expense
Office Salaries Expense
Social Security Tax Payable
Medicare Tax Payable
Employees Income Tax Payable
Medical Insurance Payable
Union Dues Payable
Salaries Payable

c. Journalize the entry to record the payment of the payroll.

Salaries Payable
Cash

Answer 1

Information Given -

		Amount ($)
Earnings:
1.	At regular rate	?
2.	At overtime rate	52900
3.	Total earnings	?
Deductions:
4.	Social security tax	21180
5.	Medicare tax	5295
6.	Income tax withheld	89900
7.	Medical insurance	12200
8.	Union dues	?
9.	Total deductions	131000
10.	Net amount paid	222000
Accounts debited:
11.	Factory Wages	187100
12.	Sales Salaries	?
13.	Office Salaries	70600

.

Answer - Part - (a) -

Calculations of amounts omitted in lines (1), (3), (8), and (12)

1.	Earnings at regular rate = [ Net amount paid + Total deductions - Earnings at overtime rate ] = $222000 + $131000 - $52900 = $300100	$300100
3.	Total earnings = [ Net amount paid + Total deductions ] = $222000 + $131000 = $353000	$353000
8.	Union dues Total deductions = $131000 Sum of deductions other than union dues = $21180 + $5295 + $89900 + $12200 = $128575 Union dues = $131000 - $128575 = $2425	$2425
12.	Sales Salaries = [ Total earnings - factory wages - office salaries ] = $353000 - $187100 - $70600 = $95300	$95300

.

Answer - Part - (b) -

Journal Entry to Record Payroll Accrual -

Particulars	Debit ($)	Credit ($)
Factory Wages Expense Sales Salaries Expense Office Salaries Expense Social Security Tax Payable Medicare Tax Payable Employees Income Tax Payable Medical Insurance Payable Union Dues Payable Salaries Payable	187100 95300 70600 - - - - - -	- - - 21180 5295 89900 12200 2425 222000
Total	353000	353000

.

Answer - Part - (c) -

Journal Entry to Record Payment of Payroll -

Particulars	Debit ($)	Credit ($)
Salaries Payable Cash	222000 -	- 222000
Total	222000	222000