Question

Payroll Entries

The A multi-column report used to assemble and summarize payroll data at the end of each payroll period.payroll register for D. Salah Company for the week ended May 18 indicated the following:

Salaries	$614,000
Federal income tax withheld	122,800

The salaries were all subject to the 6.0% social security tax and the 1.5% Medicare tax. In addition, state and federal unemployment taxes were calculated at the rate of 5.4% and 0.8%, respectively, on $12,000 of salaries.

If an amount box does not require an entry, leave it blank.

a. Journalize the entry to record the payroll for the week of May 18.

May 18	Salaries Expense Cash Medicare Tax Payable Salaries Expense Social Security Tax Payable State Unemployment Tax Payable
	Social Security Tax Payable Cash Employees Federal Income Tax Expense Salaries Expense Social Security Tax Expense Social Security Tax Payable
	Medicare Tax Payable Cash Federal Unemployment Tax Payable Medicare Tax Payable Payroll Tax Expense Salaries Expense
	Employees Federal Income Tax Payable Cash Employees Federal Income Tax Payable Payroll Taxes Expense State Unemployment Tax Expense State Unemployment Tax Payable
	Salaries Payable Cash Federal Unemployment Tax Expense Federal Unemployment Tax Payable Payroll Taxes Expense Salaries Payable

Feedback

Gross pay is the amount that employees have earned before taxes and deductions. A portion of employees' earnings are owed for such items as state and federal taxes. Net pay is also known as take home pay.

Learning Objective 2.

b. Journalize the entry to record the payroll tax expense incurred for the week of May 18.

May 18	Payroll Tax Expense Cash Medicare Tax Payable Payroll Tax Expense Social Security Tax Payable State Unemployment Tax Payable
	Social Security Tax Payable Cash Payroll Tax Expense Salaries Expense Social Security Tax Expense Social Security Tax Payable
	Medicare Tax Payable Cash Medicare Tax Payable Payroll Tax Expense Salaries Expense Salaries Payable
	State Unemployment Tax Payable Cash Payroll Tax Expense Salaries Payable State Unemployment Tax Expense State Unemployment Tax Payable
	Federal Unemployment Tax Payable Cash Federal Unemployment Tax Expense Federal Unemployment Tax Payable Payroll Tax Expense Salaries Payable

Answer 1

a.

Date	General Journal	Debit	Credit
May 18	Salary Expense	$614,000
	Social Security tax payable     [$614,000 x 6.0%]		$36,840
	Medicare tax payable              [$614,000 x 1.5%]		$9,210
	Employees federal income tax payable		$122,800
	Salaries Payable		$445,150
	(To record payroll)

.

.

b.

Social Security tax and Medicare tax are payroll taxes that are paid by both the employee and the employer.

.

Date	General Journal	Debit	Credit
May 18	Payroll Tax Expense	$614,000
	Social Security tax payable     [$614,000 x 6.0%]		$36,840
	Medicare tax payable              [$614,000 x 1.5%]		$9,210
	State Unemployment Tax Payable    [$12,000 x 5.4%]		$648
	Federal Unemployment Tax Payable      [$12,000 x 0.8%]		$96
	(To record payroll tax expense )