Question

Part b. Payroll tax expense.

Electronics Service Co. pays salaries monthly on the last day of the month. The following information is available from Electronics for the month ended December 31, Year 1: Adninistrative salaries Salen salaries Office salaries $80,000 67,000 36,000 Assume the Social Security tax rate is 6.0 percent on the first $110,000 of salaries and the Medicare tax rate is 1.5 percent on all salaries. Duke reached the $110,000 amount in September. His salary in December amounted to $15,000 and is included in the $80,000. No one else will reach the $110,000 amount for the year. None of the employee salaries are subject to unemployment tax in December Other amounts withheld from salaries in December were as follows: Federal incone tax State income tax $20,000 6,200 2,600 Employee savings plan Required a. Prepare the journal entry to record the payment of payroll on December 31, Year 1. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View transaction list View journal entry worksheet

Answer 1

Date	Account Title and Explanation	Debit	Credit
B) December 31	Administative Salaries	$80,000
	Sales Salaries	$ 67,000
	Office Salaries	$36,000
	Federal Income Tax		$ 20,000
	State Income Tax		$ 6,200
	Employee saving plan		$ 2,600
	Social Security Tax ($80,000- $15,000+$67,000+$36,000) * 6 %		$10,080
	Medicare Tax ($183,000* 1.5%)		$2,745
	Salary Payable		$141,375
	(To record the salaries expenses for the month of December )
A)December 31	Salaries Payable	$141,375
	Cash		$141,375
	(To record the payment of salaries )