The payroll of YellowCard Company for September 2013 is as follows. Total payrol
ID: 2450919 • Letter: T
Question
The payroll of YellowCard Company for September 2013 is as follows.
Total payroll was $488,100, of which $150,700 is exempt from Social Security tax because it represented amounts paid in excess of $106,800 to certain employees. The amount paid to employees in excess of $7,000 was $407,500. Income taxes in the amount of $80,280 were withheld, as was $8,350 in union dues. The state unemployment tax is 3.5%, but YellowCard Company is allowed a credit of 2.3% by the state for its unemployment experience. Also, assume that the current FICA tax is 7.65% on an employee’s wages to $106,800 and 1.45% in excess of $106,800. No employee for YellowCard makes more than $125,000. The federal unemployment tax rate is 0.8% after state credit.
Prepare the necessary journal entries if (a) the wages and salaries paid and (b) the employer payroll taxes are recorded separately. (Round answers to 0 decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts .Credit account titles are automatically indented when amount is entered. Do not indent manually.)
B.Described below are certain transactions of Edwardson Corporation. The company uses the periodic inventory system.
4. On August 1, the board of directors declared a $301,600 cash dividend that was payable on September 10 to stockholders of record on August 31.
A. Make all the journal entries necessary to record the transactions above using appropriate dates.
B. Edwardson Corporation’s year-end is December 31. Assuming that no adjusting entries relative to the transactions above have been recorded, prepare any adjusting journal entries concerning interest that are necessary to present fair financial statements at December 31. Assume straight-line amortization of discounts. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.)
No. Account Debit Credit A. salaries and wages expense 488,100 withholding taxes payable union dues payable FICA taxes payable Cash B. Payroll Tax Expense FICA taxes payable FUTA taxes payable SUTA taxes payableExplanation / Answer
Answer:A Prepare the necessary journal entries if (a) the wages and salaries paid and (b) the employer payroll taxes are recorded separately.
(a) Wages and salaries expense A/C Dr. $488,100
To Cash A/C $371473.75
To Withholding taxes payable A/C $80,280
To FICA taxes payable A/C $27996.25
To Union dues payable A/C $8,350
To calculate FICA taxes Payable:
$488100 (payroll) -$150,700 ( Social Security tax exempt )*7.65% Fica tax rate=$25811.1
$150,700 (Amount paid in excess )*1.45% (tax rate in excess of $106,800)=$2185.15
=$25811.1+$2185.15=27996.25
(b) Payroll tax expense A/C Dr. $29608.25
To FICA taxes payable A/C $27996.25
To State unemployment tax payable A/C 967.2 (80600)*(3.5%-2.3%)
To Federal unemployment tax payable A/C 644.8 (488100-$407,500)*0.8%
Answer: B
2 feb Purchases A/C Dr. ($82500 x 0.98) 80850
To Accounts Payable A/C $ 80850
Feb 26 Accounts Payable A/C Dr. $ 80850
Purchase discounts lost A/C Dr. $ 1,650
To Cash A/C $82500
2) 1 Apr Trucks A/C Dr. $ 90,000
To Note payable A/C $85,000
To Cash A/C $ 5,000
Dec 31 Interest expense A/C Dr. (36,000 x 12% x 9/12) 3,240
To Interest payable A/C $ 3,240
May 1 Cash A/C Dr. $126,000
To Note payable A/C $126,000
Dec 31 Interest expense A/C Dr. (9840 x 8/12) 6560
To Note payable A/C 6560
4) Aug 14 Retained Earnings A/C Dr. $301,600
To Dividends payable A/c $301,600
Sep 10 Dividends payable A/C Dr. $301,600
To Cash A/C $301,600
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.