Question

For the year ended December 31, 2020, Vaughn Electrical Repair Company reports the following summary payroll data $187.000 383.000 $570,000 Gross earnings: Administrative salaries Electricians' wages Total Deductions: FICA taxes Federal income taxes withheld State income taxes withheld (396) United Fund contributions payable Health insurance premiums Total $38.459 160.500 17.100 28.500 18 000 $262.559 Vaughn's payroll taxes are Social Security tax 6.256. Medicare tax 1.45%, state unemployment 2.5% (due to a stable employment record and 0.85€ federal unemployment. Gross earnings subject to Social Security taxes of 62% total $487.000 and gross earnings subject to unemployment taxes total $124.000. No employee exceeds the $127.200 limit related to FICA taxes

1. journal entry at Dec 31 for full year payroll
2. journalize the adjusting entry at Dec 31 to record employer's payroll taxes

Answer 1

No.	Account Titles and Explanation	Debit	Credit
(a)	Salaries & Wages Expense	$570,000
	FICA Taxes Payable		$38,459
	State Income Taxes Payable		$17,100
	United Fund Contribution Payable		$28,500
	Health Insurance Payable		$18,000
	Federal Income Taxes Payable		$160,500
	Salaries & Wages Payable		$307,441
(b)	Payroll Tax Expense	$42,551
	FICA Taxes Payable		$38,459
	State Income Taxes Payable		$3,100	($124000 x 2.5%)
	Federal Income Taxes Payable		$992	($124000 x 0.8%)