The following information about the payroll for the week ended December 30 was obtained from the records of Pharrell Co.:
Salaries:
Sales salaries $325,000
Warehouse salaries 200,000
Office salaries 142,000
Total $667,000
Deductions: Income tax withheld $116,600
Social security tax withheld 40,020
Medicare tax withheld 10,005
Retirement savings 14,674
Group insurance 12,006
total $193,305
Tax rates assumed:
Social security 6%
Medicare 1.5%
State unemployment (employer only) 5.4%
Federal unemployment (employer only) 0.6%
Required: 1. Assuming that the payroll for the last week of the year is to be paid on December 31, journalize the following entries (refer to the Chart of Accounts for exact wording of account titles): A. December 30, to record the payroll. B. December 30, to record the employer's payroll taxes on the payroll to be paid on December 31. Of the total payroll for the last week of the year, $32,000 is subject to unemployment compensation taxes. 2. Assuming that the payroll for the last week of the year is to be paid on January 5 of the following fiscal year, journalize the following entries (refer to the Chart of Accounts for exact wording of account titles): A. On page 11 of the journal: December 30, to record the payroll. B. On page 12 of the journal: January 5, to record the employer’s payroll taxes on the payroll to be paid on January 5. Because it is a new fiscal year, all salaries are subject to unemployment compensation taxes.
Requirement 1A: Record the following journal entry for payroll expenses
Date | Account Title and Explanation | Debit | Credit |
Dec 30 | Sales Salaries Expense | $325,000 | |
Warehouse Salaries Expense | $200,000 | ||
Office Salaries Expense | $142,000 | ||
Employee Income Tax Payable | $116,600 | ||
Social Security Tax Payable | $40,020 | ||
Medicare Tax Payable | $10,005 | ||
Retirement Savings Payable | $14,674 | ||
Group Insurance Payable | $12,006 | ||
Salaries Payable ($667,000 − $193,305) | $473,695 | ||
To record payroll expenses |
Requirement 1B: Record the following journal entry for employer's payroll taxes
Date | Account Title and Explanation | Debit | Credit |
Dec 30 | Payroll Tax Expense | $51,945 | |
Social Security Tax Payable | $40,020 | ||
Medicare Tax Payable | $10,005 | ||
State Unemployment Tax Payable ($32,000 × 5.4%) | $1,728 | ||
Federal Unemployment Tax Payable ($32,000 × 0.6%) | $192 | ||
To record employer's payroll taxes |
Requirement 2A: Record the following journal entry for payroll expenses
Date | Account Title and Explanation | Debit | Credit |
Dec 30 | Sales Salaries Expense | $325,000 | |
Warehouse Salaries Expense | $200,000 | ||
Office Salaries Expense | $142,000 | ||
Employee Income Tax Payable | $116,600 | ||
Social Security Tax Payable | $40,020 | ||
Medicare Tax Payable | $10,005 | ||
Retirement Savings Payable | $14,674 | ||
Group Insurance Payable | $12,006 | ||
Salaries Payable ($667,000 − $193,305) | $473,695 | ||
To record payroll expenses |
Requirement 2B: Record the following journal entry for employer's payroll taxes
Date | Account Title and Explanation | Debit | Credit |
Jan 5 | Payroll Tax Expense | $90,045 | |
Social Security Tax Payable | $40,020 | ||
Medicare Tax Payable | $10,005 | ||
State Unemployment Tax Payable ($667,000 × 5.4%) | $36,018 | ||
Federal Unemployment Tax Payable ($667,000 × 0.6%) | $4,002 | ||
To record employer's payroll taxes |
The following information about the payroll for the week ended December 30 was obtained from the...
The following information about the payroll for the week ended December 30 was obtained from the records of Pharrell Co.: Salaries: Sales salaries $335,000 Warehouse salaries 186,000 Office salaries 144,000 $665,000 Deductions: Income tax withheld $116,800 Social security tax withheld 39,900 Medicare tax withheld 9,975 Retirement savings 14,630 Group insurance 11,970 $193,275 Tax rates assumed: Social security 6% Medicare 1.5% State unemployment (employer only) 5.4% Federal unemployment (employer only) 0.6% Required: 1. Assuming that the payroll for the last week...
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