Question

Pronghorn Company pays its office employee payroll weekly. Below is a partial list of employees and their payroll data for August. Because August is their vacation period, vacation pay is also listed.

Employee		Earnings to July 31			Weekly Pay			Vacation Pay to Be Received in August
Mark Hamill		$5,620			$200			-
Karen Robbins		4,920			150			$300
Brent Kirk		4,120			110			220
Alec Guinness		8,820			250			-
Ken Sprouse		9,420			330			660

Assume that the federal income tax withheld is 10% of wages. Union dues withheld are 2% of wages. Vacations are taken the second and third weeks of August by Robbins, Kirk, and Sprouse. The state unemployment tax rate is 2.5% and the federal is 0.8%, both on a $7,000 maximum. The FICA rate is 7.65% on employee and employer on a maximum of $118,500 per employee. In addition, a 1.45% rate is charged both employer and employee for an employee’s wages in excess of $118,500.

Make the journal entries necessary for each of the four August payrolls. The entries for the payroll and for the company’s liability are made separately. Also make the entry to record the monthly payment of accrued payroll liabilities. (Round answers to 2 decimal places, e.g. 15.25. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit
(To record Payroll 1.)
(To record Payroll taxes for Payroll 1.)
(To record payrolls 2 and 3.)
(To record payroll taxes for Payrolls 2 and 3.)
(To record payroll 4.)
(To record payroll taxes for payroll 4.)
(To record the monthly payment of accrued payroll liabilities.)

Answer 1

Answel Page No 0 Towinal entries Eintrigs for payoo!!! Googes & salaries expense = $200 + $150 + $110 + $250 + $ 330 - $1040 To withholding taxes payable = 10 4 X 1040 = $ 104 TO FICA tares payable = 765.X 1040 : = $79.56 To onion dues payable afc = 24 x 1040 - $20.80 Cash = 1040 - 104 - 79.56 - 20-80 = $ 835:64 To federal unemployment tax payable = 0.8 % * (200+ 150*110 = $3.68 To state unemployment. tax payable alc = 2,5% (200 +1507) = $11,50 Payotoll tax expense afc = 49.56 + 3.68 + 11150 a $ 94.74

Fabies for payonell a 4 3 Page No $300 + $ 200 + $660) Vacation wages payable aſc = =$590 coages and salaries expense = (104 + 49.56 + 20.80 +835164) -590 - 1040-590 = $ 450 Entries for payroll 4 wages and salaries expense ale = $1040 Monthly payments of payroll liabilities with hofding taxes payable = $104 X 4 - $416 FICA taxes payable alc = $ 49.56 x 8 = $636148 union dues pceyable alc = 90.80 14 = $83.2 federal unemployment tax payable -- 3168X4.= $14072 State unemployment tax payable = 115084 = $ 46 Cash = 416 + 636:48 + 83+27 +14.72 +46 $119604

Page No ③ Credit Debit $104 $79.56 $20180 $835.64 tot $7956 $ 3,68 $11.50 Particular coages and salaries expense als $1040 To withholding taxes payable To FICA taxes payable To unions dues payable To cash ( To record payroll 1) Yayor ofl tax expense ala $94874 TO FICA taxes payable als To federal unemployment tax payable - To state unemployment tax payable (to record payroll taxes for payroll!) Vacation wages payable ale": $ 590 wages & salaries Expense ale $ 450 To withholding taxes payable TO FICA taxes payable To onion dues payable - To cash (to record payroll 2 & 3) Payroll tax expense 94.74 TO FICA taxes payable alc To federal unemployment tax payable To sfate unemployment for payable (to record pay och fares for paysroll 283) $104 $79156 $ 80.80 $835.64 $79156 $368

$94.74 Page. No 4 Particular Debit | Credit wages a salaries expense al $1040 To with holding taxes payable aſe $104 TO FICA taxes payable alc $ 49.56 To union dues payable all * 20.80 TO cash $835.64 70xecard payroll 4) - Payoroll tar expense al TO FICA taxes payable alc $ 79,56 To federal unemployment tax payable ole a To afate unemployment far payable ale 11.50 (To record payroll fares for payroll 4) withholding taxes payable alc $ 416 FICA taxes payable af $636.48 union dues payable aic federal unemployment tax payable ale $ 14-722 state unemployment bax payable ale $ 46 . To cash ac $ 1196.40 to record monthly payment of accrued payroll liabilities $ 368