The following information about the payroll for the week ended December 30 was o

Question

The following information about the payroll for the week ended December 30 was obtained from the records of Qualitech Co.: Salaries: Sales salaries Warehouse salaries Office salaries $330,000 180,000 147,000 $657,000 Income tax withheld Social security tax withheld Medicare tax withheld U.S. savings bonds Group insurance $116,600 39,420 9,855 4,454 11,826 192,155 Tax rates assumed: Social security Medicare State unemployment (employer only) Federal unemployment (employer only) 6% 1.5% 5.4% 0.8% Required 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 tities) 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, $31,000 is subject to unemployment compensation taxes. Include the year when enter the date in the journal

Explanation / Answer

1a Date Description Debit Credit Dec. 30, 2015 Sales Salaries Expense 330,000 Warehouse Salaries Expense 180,000 Office Salaries Expense 147,000 Employees Income Tax Payable 116,600 Social Security Tax Payable 39,420 Medicare Tax Payable 9,855 Bond Deductions Payable 14,454 Group Insurance Payable 11,826 Salaries Payable 464,845 b Dec. 30, 2015 Payroll Tax Expense 51,197 Social Security Tax Payable 39,420 Medicare Tax Payable 9,855 State Unemployment Tax Payable1 1,674 Federal Unemployment Tax Payable2 248 1 $31,000 × 5.4% 2 $31,000 × 0.8% 2a Dec. 30, 2015 Sales Salaries Expense 330,000 Warehouse Salaries Expense 180,000 Office Salaries Expense 147,000 Employees Income Tax Payable 116,600 Social Security Tax Payable1 39,420 Medicare Tax Payable2 9,855 Bond Deductions Payable 14,454 Group Insurance Payable 11,826 Salaries Payable 464,845 b Jan. 5, 2016 Payroll Tax Expense 90,009 Social Security Tax Payable 39,420 Medicare Tax Payable 9,855 State Unemployment Tax Payable3 35,478 Federal Unemployment Tax Payable4 5,256 3 $657,000 × 5.4% 4 $657,000 × 0.8%

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