Question

In the following summary of data for a payroll period, some amounts have been intentionally omitted:

Earnings: 1. At regular rate ?

2. At overtime rate $80,000

3. Total earnings ? Deductions:

4. Social security tax 32,400

5. Medicare tax 8,100

6. Income tax withheld 135,000

7. Medical insurance 18,900

8. Union dues ?

9. Total deductions 201,150

10. Net amount paid 338,850 Accounts debited:

11. Factory Wages 285,000

12. Sales Salaries ?

13. Office Salaries 120,000

Required:

 

A. Calculate the amounts omitted in lines (1), (3), (8), and (12).

B. On December 19, journalize the entry to record the payroll accrual.*

C. On December 20, journalize the entry to record the payment of the payroll. * Refer to the Chart of Accounts for exact wording of account titles.

Answer 1

• 
  3. Total earnings = Net amount paid+ Total deductions
  $338,850 + 201,150 = $540,000 total earnings (3)
  
  1. At regular rate = Total earnings - At overtime rate
  $540,000 - 80,000 = $460,000 regular rate (1)
  
  8.
  Total deductions $201,150
• Less:
  Social security tax 32,400
  Medicare tax 8,100
  Income tax withheld 135,000
  Medical insurance 18,900
• =
  Union dues $6,750 (8)
  
  12.
  Total earnings $540,000
  Factory Wages 285,000
  Office Salaries 120,000
  Sales salaries $135,000 (12)
• 
  Dr Factory Wages Expense 285,000
  Dr Sales Salaries Expense 135,000
  Dr Office Salaries Expense 120,000
  Cr Social Security Tax Payable 32,400
  Cr Medicare Tax Payable 8100
  Cr Employees Income Tax Payable 135,000
  Cr Medical Insurance Payable 18,900
  Cr Union Dues Payable 6,750
  Cr Salaries Payable 338,850
  
  c.
• 
  Dr Salaries Payable 338,850
  Cr Cash 338,850