Question

Entries for Payroll and Payroll Taxes

The following information about the payroll for the week ended December 30 was obtained from the records of Saine Co.:

Salaries:				Deductions:
	Sales salaries	$284,000			Income tax withheld	$102,960
	Warehouse salaries	156,000			U.S. savings bonds	12,870
	Office salaries	145,000			Group insurance	10,530
		$585,000

Tax rates assumed:
	Social security, 6%
	Medicare, 1.5%
	State unemployment (employer only), 5.4%
	Federal unemployment (employer only), 0.8%

Required:

If an amount box does not require an entry, leave it blank.

1a. Assuming that the payroll for the last week of the year is to be paid on December 31, journalize the entry on December 30, to record the payroll.

Date	Account	Debit	Credit
Dec. 30

1b. Assuming that the payroll for the last week of the year is to be paid on December 31, journalize the entry on December 30, to record the employer's payroll taxes on the payroll to be paid on December 31. Of the total payroll for the last week of the year, $29,000 is subject to unemployment compensation taxes.

Date	Account	Debit	Credit
Dec. 30

2a. Assuming that the payroll for the last week of the year is to be paid on January 4 of the following fiscal year, journalize the entry on December 30, to record the payroll.

Date	Account	Debit	Credit
Dec. 30

2b. Assuming that the payroll for the last week of the year is to be paid on January 4 of the following fiscal year, journalize the entry on January 4, to record the employer's payroll taxes on the payroll to be paid on January 4. Because it is a new fiscal year, all $585,000 in salaries is subject to unemployment compensation taxes.

Date	Account	Debit	Credit
Jan. 4

Answer 1

S no	Date	General Journal	Debit	Credit
1a	Dec 30	Sales salaries expense	284,000
		Warehouse salaries expense	156,000
		Office salaries expense	145,000
		Employee income taxes payable		102,960
		Social security taxes payable [585,000*6%]		35,100
		Medicare taxes payable [585,000*1.5%]		8,775
		Bond deductions payable		12,870
		Group Insurance payable		10,530
		Salaries payable [bal.fig.]		414,765
1b	Dec 30	Payroll tax expense	45,673
		Social security taxes payable		35,100
		Medicare taxes payable		8,775
		State unemployment tax payable [29,000*5.4%]		1566
		Federal unemployment tax payable [29,000*0.8%]		232
2a	Dec 30	Sales salaries expense	284,000
		Warehouse salaries expense	156,000
		Office salaries expense	145,000
		Employee income taxes payable		102,960
		Social security taxes payable [585,000*6%]		35,100
		Medicare taxes payable [585,000*1.5%]		8,775
		Bond deductions payable		12,870
		Group Insurance payable		10,530
		Salaries payable [bal.fig.]		414,765
2b	Jan 4	Payroll tax expense	80145
		Social security taxes payable		35,100
		Medicare taxes payable		8,775
		State unemployment tax payable [585,000*5.4%]		31590
		Federal unemployment tax payable [585,000*0.8%]		4680