The summary of the payroll for the monthly pay period ending July 15 indicated t

Question

The summary of the payroll for the monthly pay period ending July 15 indicated the following:

A) Journalize the entry to record the payroll. For a compound transaction, if an amount box does not require an entry, leave it blank or enter "0"

B) Journalize the entry to record the employer's payroll tax expense for the month. The state unemployment tax rate is 3.1%, and the federal unemployment tax rate is 0.8%. Only $25,000 of salaries are subject to unemployment taxes. For a compound transaction, if an amount box does not require an entry, leave it blank or enter "0".

Explanation / Answer

A)Journal Entry:-

Debit Sales Salaries = 125,000

Debit Office Salaries = 35,000

Credit Federal Income Tax Withheld = 32,300

Credit Medical Insuarnce withheld = 7,370

Credit Social Security Tax withheld = 10,200

Credit Medicare Tax Withheld = 2,550

Credit Salaries Payable = 7580

..

..

b)Debit Payroll Expenses = 160,975

Credit Sales Salaries = 125,000

Credit Office Salaries = 35,000

Credit State unemployment tax (25000*3.1%) = 775

Credit Federal unemployment tax (25000*0.8%) = 200

..

..

Debit Profit & Loss A/C = 160,975

Credit Payroll Expenses = 160,975

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