The payroll register for Candlelight Corporation contained the following totals
ID: 2427913 • Letter: T
Question
The payroll register for Candlelight Corporation contained the following totals at the end of July: wages, $278,250; federal income taxes withheld, $71,163; state income taxes withheld, $11,727; Social Security tax withheld, $17,253; Medicare tax withheld, $4,035; medical insurance deductions, $9,600; and wages subject to unemployment taxes, $171,720. Prepare journal entries to record the (1) monthly payroll and (2) employer payroll expenses, assuming Social Security and Medicare taxes equal to the amount for employees, a federal unemployment insurance tax of 0.8 percent, a state unemployment tax of 5.4 percent, and medical insurance premiums for which the employer pays 80 percent of the cost.Explanation / Answer
Journal Entries:
Date
Accounts Titles and Explanations
Debit
Credit
1
Monthly Payroll:
Salaries expense
$ 278,250.00
Federal Income taxes withholdings Payable
$ 71,163.00
State income taxes withholdings Payable
$ 11,727.00
Social Security tax withholding Payable
$ 17,253.00
Medicare tax withholding Payable
$ 4,035.00
Medical insurance
$ 9,600.00
Net Payroll Payable
$ 164,472.00
2
Employer Payroll:
Federal Income taxes
$ 71,163.00
State income taxes
$ 11,727.00
Social Security tax
$ 17,253.00
Medicare tax
$ 4,035.00
Federal unemployment insurance tax (171720*0.8%)
$ 1,373.76
State unemployment tax (171720*5.4%)
$ 9,272.88
Medical insurance (9600*80%)
$ 7,680.00
FICA Tax Payable
$ 122,504.64
Journal Entries:
Date
Accounts Titles and Explanations
Debit
Credit
1
Monthly Payroll:
Salaries expense
$ 278,250.00
Federal Income taxes withholdings Payable
$ 71,163.00
State income taxes withholdings Payable
$ 11,727.00
Social Security tax withholding Payable
$ 17,253.00
Medicare tax withholding Payable
$ 4,035.00
Medical insurance
$ 9,600.00
Net Payroll Payable
$ 164,472.00
2
Employer Payroll:
Federal Income taxes
$ 71,163.00
State income taxes
$ 11,727.00
Social Security tax
$ 17,253.00
Medicare tax
$ 4,035.00
Federal unemployment insurance tax (171720*0.8%)
$ 1,373.76
State unemployment tax (171720*5.4%)
$ 9,272.88
Medical insurance (9600*80%)
$ 7,680.00
FICA Tax Payable
$ 122,504.64
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