Question

12 Use this information to answer the following 3 questions The following totals for the month of November were taken from the payroll register of Levine Company: salaries expense Social security and Medicare taxes withheld Incom e taxes withheld Medical insurance deductions Life insurance deductions Salaries subject to federal and state unemployment taxes of 6.2 percent $12,000 550 2,500 250 200 4,000 The journal entry to record the monthly payroll on November 30 would include a a. b. c. d. debit to Salaries Expense for $12,000. debit to Salaries Expense for $8,500 debit to Salaries Payable for $12,000 credit to Salaries Payable for $12,000. 13 The entry to record the payment of net payroll would include a a debit to Salaries Payable for $7,950 b. debit to Salaries Payable for $8,500. C. credit to Cash for $9,050 d. debit to Salaries Payable for $12,000 14 The entry to record the accrual of employer's payroll taxes would include a debit to Payroll Taxes Expense for a. $248. b. $550 c. $798. d. $1,248

Answer 1

Question 12: The answer is a.

Journal entry is as follows:

Date	Account titles and Explanation	Debit	Credit
Nov 30	Salaries expenses a/c	$12,000
	Income taxes withheld		$2,500
	Social security and Medicare taxes withheld		$550
	Medical insurance deductions		$250
	Life insurance deductions		$200
	Salaries payable a/c		$8,500
	Being payroll expense for November recorded]

Question 13: The answer is b.

After the above journal entry, the following journal entry will be made for the payment of payroll to employees:

Date	Account titles and Explanation	Debit	Credit
	Salary payable a/c	$8,500
	Cash a/c		$8,500
	[Being payroll payment made for the november month]

Question 14: The answer is C

Calculation of payroll taxes to be paid by Employer

a. Social Security and Medicare taxes =$550

b. Federal and State Unemployment taxes [4,000 x 6.2%] = $248

Total Payroll expenses [a + b] = $798

Note:

1. Employer need to pay Social security and Medicare taxes equal to Employee's social security and Medicare taxes.

2. Only Employer must pay Unemployment taxes. Employee's have no obligation to pay the Unemployment taxes.