Question

Recording Payroll and Payroll Taxes Beamon Corporation had the following payroll for April: Officers' salaries Sales salaries Federal income taxes tithheld FICA taxes withheld Health insurance premiums withheld Union dues withheld Salaries included above) subject to federal unemployment taxes Salaries included abovej subject to state unemployment taxes $320,000 670,000 190,000 75,000 16.000 12.000 550.000 600.000 Required Prepare journal entries on April 30 to record: a. Accrual of the monthly payroll. b. Payment of the net payroll C. Accrual of employer's payroll taxes. (Assume that the FICA tax matches the amount withheld, the federal unemployment tax is 06 percent, and the state unemployment tax is 5.4 percent.) d. Payment of all liabilities related to this payroll. (Assume that all are settled at the same time.)

Answer 1

a. & b:

In the books of Logal Company:

General Journal
Date	Description	Debit	Credit
		$	$
Apr 8	Accounts Payable	7,800
	Notes Payable: Bennett Company		7,800
May 15	Cash	39,000
	Notes Payable: Lincoln Bank		39,000
June 22	Notes Payable: Bennett Company	7,800
	Interest Expense ( $ 7,800 x 8 % x 75 / 360)	130
	Cash		7,930
July 6	Merchandise Inventory	15,000
	Notes Payable : Bolton Company		15,000
Jul 14	Notes Payable: Lincoln Bank	39,000
	Interest Expense ( $ 39,000 x 9 % x 60/360)	585
	Cash		39,585
Oct 2	Cash	27,000
	Notes Payable: Lincoln Bank		27,000
Oct 4	Notes Payable: Bolton Company	15,000
	Interest Expense ( $ 15,000 x 10 % x 90/360)	375
	Accounts Payable		15,375
Adjusting Entries
Dec 31	Interest Expense ( $ 27,000 x 12 % x 90 / 360)	810
	Interst Payable		810