Question

During the month of February, Whispering Winds Corp's employees earned wages of $9.200,094,000. Withholdings related to these wares were $703,807,191 for FICA. $17.750 for federal income tax, and $4,750 for state income tax. Costs incurred for unemployment taxes were $275 for federal and $400 for state. Prepare the February 28 journal entries for (a) Salaries and wages expense and salaries and wages payable assuming that all February wages will be paid in March. (b) The company's payroll tax expense.

Answer 1

Solution Question 1 $9,200,094,000 Gross wages FICA Tax withholding $703,807,191 Federal Income taxes $17,750 $4,750 State Income taxes Federal Unemployment taxes $275 State Unemployment taxes $400 Account Titles and Explanation Debit Credit No. Date Salaries and Wages expense (a) Feb. 28 $9,200,094,000 FICA taxes payable $703,807,191 $17,750 Federal Income taxes payable State Income taxes payable $4,750 Salaries and Wages Payable (Bal. fig.) $8,496,264,309 (To record payroll and withholding taxes) Payroll Taxes expense (b) Feb. 28 $703,807,866 FICA taxes payable $703,807,191 Federal Unemployment taxes Payable $275 State Unemployment taxes Payable (To record employer's payroll taxes expense) $400 Question# 2 Amount of mortgage note Rate of interest $540,000 10% Account Titles and Explanation Debit Credit Date Buildings Dec.31, 2022 $540,000 Notes Payable (To record issue of 10 % 10-year mortgage note) $540,000 Interest Expense ($540,000 x 10 %) Notes Payable ($87,883 - $54,000) Dec.31, 2023 $54,000 $33,883 Cash $87,883 (To record the first installment payment)