Question

Problem: The following payroll liability accounts are included in the ledger of Armitage Company on January 1. FICA-SS Taxes Payable FICA-Medicare Payable Federal Income Taxes Payable State Income Taxes Payable Federal Unemployment Taxes Payable State Unemployment Taxes Payable Union Dues Payable U.S. Savings Bonds Payable $ 615.60 144.40 1,204.60 108.95 288.95 1,954.40 870.00 360.00 In January, the following transactions occurred. Jan. 10 Sent check for $870.00 to union treasurer for union dues. Deposited check for $1,964.60 in Federal Reserve bank for FICA taxes and federal income taxes withheld. Purchased U.S. Savings Bonds for employees by writing check for $360.00. Paid state income taxes withheld from employees. Paid federal and state unemployment taxes. Completed monthly payroll register, which shows office salaries $26,600, store wages $28,400, FICA-SS taxes withheld 6.2%, FICA-Medicare taxes withheld 1.45%, federal income taxes withheld $2,158, state income taxes withheld 3%, union dues withheld $400, United Fund contributions withheld $1,888. Prepared payroll checks for the net pay and distributed checks to employees. Recorded employer payroll taxes: FICA-SS taxes 6.2%, FICA-Medicare 1.45%, federal unemployment taxes 0.8%, and state unemployment taxes 5.4%. Recorded vacation pay: 6% of gross earnings. 31 Instructions: Record the entries in the general journal. Check figure: Payroll tax expense is $7,617.50.

Answer 1

Armitage Company Journal Enteries Date Particulars Jan-10 Union Dues Payable a/c Dr. To Cash (Sent check to union treasurer for union dues) Debit in $ Credit in $ 870 870 Jan-12 FICA Taxes Payable a/c Dr. 760 Federal Income Taxes Payable a/c Dr. 1204.6 To Cash (Remitted check to the Federal Reserve bank for FICA taxes and federal income taxes withheld) 1964.6 Jan-15 360 U.S. Savings Bonds Payable a/c Dr. To Cash (Purchased U.S. Savings Bonds for employees) 360 Jan-17 108.95 State Income Taxes Payable a/c Dr. To Cash (Paid state income taxes withheld) 108.95 288.95 Jan-20 Federal Unemployment Taxes Payable a/c Dr. To Cash (Paid federal and state unemployment taxes) 288.95 55000 Jan-31 Salaries & Wages Expenses a/c Dr. TO FICA Taxes Dues TO FICA Medicare Taxes Dues To Federal Income Taxes Payable To State Income Taxes Payable To Union Dues Payable To United Fund Contributions Payable To Salaries & Wages Payable (Net Pay) (To record payroll checks for the net pay) 55000 x 6.2% = 3410 55000 x 3% = 1650 3410 798 2158 1650 400 1888 44697 Dr. 44697 Jan-31 Salaries & Wages Payable a/c To Cash (Distributed checks to employees) 44697

Adjusting Enteries Date Particulars Jan-31 Payroll Tax Expense a/c Dr. TO FICA Taxes Payable TO FICA Medicare Taxes Dues To Federal Unemployment Taxes Payable To State Unemployment Taxes Payable (To record employer's payroll taxes) 55000 x 0.8% Debit in $ Credit in $ 7617.5 3410 798 440 2970 Dr. 3300 Jan-31 Vacation Benefits Expense a/c To Vacation Benefits Payable (To record vacation pay) 55000 x 6% 3300