The following information about the payroll for the week ended December 30 was o
ID: 2467636 • Letter: T
Question
The following information about the payroll for the week ended December 30 was obtained from the records of Qualitech Co.:
Required:
Salaries:
Sales salaries
$350,000
Warehouse salaries
182,000
Office salaries
136,000
$668,000
Deductions:
Income tax withheld
$117,000
Social security tax withheld
40,080
Medicare tax withheld
10,020
U.S. savings bonds
14,696
Group insurance
12,024
$193,820
Tax rates assumed:
Social security
6%
Medicare
1.5%
State unemployment (employer only)
5.4%
Federal unemployment (employer only)
0.8%
1.
Assuming that the payroll for the last week of the year is to be paid on December 31, 2015, journalize the following entries (refer to the Chart of Accounts for exact wording of account titles):
A.
December 30, 2015, to record the payroll. Include the year when enter the date in the journal.
B.
December 30, 2015, to record the employer's payroll taxes on the payroll to be paid on December 31. Of the total payroll for the last week of the year, $34,000 is subject to unemployment compensation taxes. Include the year when enter the date in the journal.
2.
Assuming that the payroll for the last week of the year is to be paid on January 5 of the following fiscal year, journalize the following entries (refer to the Chart of Accounts for exact wording of account titles):
A.
On page 11 of the journal: December 30, 2015, to record the payroll. Include the year when enter the date in the journal.
B.
On page 12 of the journal: January 5, 2016, to record the employer's payroll taxes on the payroll to be paid on January 5, 2016. Because it is a new fiscal year, all $668,000 in salaries is subject to unemployment compensation taxes. Include the year when enter the date in the journal.
CHART OF ACCOUNTS
Qualitech Co.
General Ledger
ASSETS
110
Cash
111
Accounts Receivable
112
Interest Receivable
113
Notes Receivable
115
Merchandise Inventory
116
Supplies
118
Prepaid Insurance
120
Land
123
Building
124
Accumulated Depreciation-Building
125
Office Equipment
126
Accumulated Depreciation-Office Equipment
LIABILITIES
210
Accounts Payable
213
Interest Payable
214
Notes Payable
215
Salaries Payable
216
Social Security Tax Payable
217
Medicare Tax Payable
218
Employees Income Tax Payable
220
Group Insurance Payable
221
Bond Deductions Payable
222
Union Dues Payable
223
Retirement Savings Deductions Payable
224
Federal Unemployment Tax Payable
225
State Unemployment Tax Payable
226
Vacation Pay Payable
227
Unfunded Pension Liability
EQUITY
310
Owner, Capital
311
Owner, Drawing
312
Income Summary
REVENUE
410
Sales
610
Interest Revenue
EXPENSES
510
Cost of Merchandise Sold
520
Sales Salaries Expense
521
Warehouse Salaries Expense
522
Office Salaries Expense
524
Depreciation Expense-Building
525
Delivery Expense
526
Repairs Expense
529
Selling Expenses
531
Rent Expense
532
Depreciation Expense-Office Equipment
533
Insurance Expense
534
Supplies Expense
535
Payroll Tax Expense
536
Vacation Pay Expense
537
Pension Expense
538
Cash Short and Over
540
Miscellaneous Expense
710
Interest Expense
JOURNAL
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
1
2
3
4
5
6
7
8
9
10
11
12
13
14
2.
Assuming that the payroll for the last week of the year is to be paid on January 5 of the following fiscal year, journalize the following entries (refer to the Chart of Accounts for exact wording of account titles):
A.
On page 11 of the journal: December 30, 2015, to record the payroll. Include the year when enter the date in the journal.
B.
On page 12 of the journal: January 5, 2016, to record the employer's payroll taxes on the payroll to be paid on January 5, 2016. Because it is a new fiscal year, all $668,000 in salaries is subject to unemployment compensation taxes. Include the year when enter the date in the journal.
PAGE 11PAGE 12
JOURNAL
DATE
DESCRIPTION
POST. REF.
DEBIT
CREDIT
1
2
3
4
5
6
7
8
9
Required:
Salaries:
Sales salaries
$350,000
Warehouse salaries
182,000
Office salaries
136,000
$668,000
Deductions:
Income tax withheld
$117,000
Social security tax withheld
40,080
Medicare tax withheld
10,020
U.S. savings bonds
14,696
Group insurance
12,024
$193,820
Tax rates assumed:
Social security
6%
Medicare
1.5%
State unemployment (employer only)
5.4%
Federal unemployment (employer only)
0.8%
1.
Assuming that the payroll for the last week of the year is to be paid on December 31, 2015, journalize the following entries (refer to the Chart of Accounts for exact wording of account titles):
A.
December 30, 2015, to record the payroll. Include the year when enter the date in the journal.
B.
December 30, 2015, to record the employer's payroll taxes on the payroll to be paid on December 31. Of the total payroll for the last week of the year, $34,000 is subject to unemployment compensation taxes. Include the year when enter the date in the journal.
2.
Assuming that the payroll for the last week of the year is to be paid on January 5 of the following fiscal year, journalize the following entries (refer to the Chart of Accounts for exact wording of account titles):
A.
On page 11 of the journal: December 30, 2015, to record the payroll. Include the year when enter the date in the journal.
B.
On page 12 of the journal: January 5, 2016, to record the employer's payroll taxes on the payroll to be paid on January 5, 2016. Because it is a new fiscal year, all $668,000 in salaries is subject to unemployment compensation taxes. Include the year when enter the date in the journal.
Explanation / Answer
Dec 30
Sales Salaries Expense
350,000
Warehouse Salaries Expense
182,000
Office Salaries Expense
136,000
Employees Income Tax Payable
117,000
Social Security Tax Payable.
40,080
Medicare Tax Payable
10,020
Bond Deductions Payable
14,696
Group Insurance Payable
12,024
Salaries Payable
474,180
Dec 30
Payroll tax expense
52,456
Social security tax payable
40,080
Medicare tax payable
10,020
State Unemployment Tax Payable(38,000@5.4%)
2,052
Federal Unemployment Tax Payable(38,000@.8%)
304
2)
Dec 30
Sales salaries expense
350,000
Warehouse sales salaries
182,000
Office salaries expense
136,000
To Employee income tax payable
117,000
To Social security tax payable 668,000@6%
40,080
To Medicare tax payable 668,000@1.5%
10,020
To bond deduction payable
14,696
To Group insurance payable
12,024
To Salaries payable
474,180
Dec 30
Payroll tax expense
91,516
To social security tax payable
40,080
To Medicare tax payable
10,020
To State unemployment tax payable 668,000 @5.4%
36,072
To Federal unemployment tax 668,000@.8%
5,344
Dec 30
Sales Salaries Expense
350,000
Warehouse Salaries Expense
182,000
Office Salaries Expense
136,000
Employees Income Tax Payable
117,000
Social Security Tax Payable.
40,080
Medicare Tax Payable
10,020
Bond Deductions Payable
14,696
Group Insurance Payable
12,024
Salaries Payable
474,180
Dec 30
Payroll tax expense
52,456
Social security tax payable
40,080
Medicare tax payable
10,020
State Unemployment Tax Payable(38,000@5.4%)
2,052
Federal Unemployment Tax Payable(38,000@.8%)
304
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