Journalize payroll transactions and adjusting entries . (LO 3, 4) The following
ID: 2463950 • Letter: J
Question
Journalize payroll transactions and adjusting entries.
(LO 3, 4)
The following payroll liability accounts are included in the ledger of Harmon Company on January 1, 2017.
In January, the following transactions occurred.
At January 31, the company also makes the following accrued adjustments pertaining to employee compensation.
1.Employer payroll taxes: FICA taxes 7.65%, federal unemployment taxes 0.8%, and state unemployment taxes 5.4%.
2.* Vacation pay: 6% of gross earnings.
Instructions
(a)
Journalize the January transactions.
(b)
Journalize the adjustments pertaining to employee compensation at January 31.
Payroll tax expense $8,033; Vacation benefits expense $3,480
FICA Taxes Payable $ 760.00 Federal Income Taxes Payable 1,204.60 State Income Taxes Payable 108.95 Federal Unemployment Taxes Payable 288.95 State Unemployment Taxes Payable 1,954.40 Union Dues Payable 870.00 U.S. Savings Bonds Payable 360.00Explanation / Answer
a) Journal entries for January Jan-10 Union Dues Payable Dr 870 Cash Cr 870 ( To record amount paid for union dues) Jan-12 FICA Taxes payable Dr 760 Federal Income taxes Payable Dr 1204.6 Cash Cr 1964.6 ( To record amount paid for FICA taxes and federal taxes withheld) Jan-15 US Savings Bonds Dr 360 Cash Cr 360 ( To record purchase of US Saving Bonds) Jan-17 State Income Taxes Payable Dr 108.95 Cash Cr 108.95 ( To record payment of state income tax payable) Jan-20 Federal Unemployment Taxes Payable Dr 288.95 State Unemployment Taxes Payable Dr 1954.4 Cash Cr ( To record payment of state and federal unemployment taxes) Jan-31 Salaries and Wages Dr 58000 Fica Taxes Payable Cr 4437 Federal Income taxes Payable Cr 2158 State Income Taxes Payable Cr 454 Union Dues Payable Cr 400 United Fund contributions payable Cr 1888 Salary Payable Cr 48663 ( To record monthly payroll ) Jan-31 Salary payable Dr 48663 Cash Cr 48663 ( To record payment of salaries to employees) b) Journal for accrued adjustments (1) Jan-31 FICA Taxes ( 7,65% of 58000) Dr 4437 Federal unemployment taxes (0.8% of 58000) Dr 464 State Unemployment taxes ( 5.4% of 58000) Dr 3132 Fica Taxes Payable Cr 4437 Federal Unemployment Taxes Payable Cr 464 State Unemployment Taxes Payable Cr 3132 ( To record tax expenses of the company) (2) Jan-31 Vacation Pay expense Dr 3480 Vacation pay benefit payable Cr 3480 ( To record vacation benefit of the company)
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