Obi. 2 obtained from PR 10-2A Entries for payroll and payroll taxes yroll The fo
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Obi. 2 obtained from PR 10-2A Entries for payroll and payroll taxes yroll The following information about the payroll for t 476 the records of Boltz Co. Deductions: $540,000 Income tax withheld 155,000 U.S. savings bonds Salaries: Sales salaries Warehouse salaries Office salaries $160,000 10,500 9,000 GER Group insurance 85,000 $780,000 Tax rates assumed: Social security, 6% Medicare, 1.5% State unemployment (employer only), 54% Federal unemployment (employer only), 0.3% Instructions 1. Assuming that the payroll for the last week of the year is to be paid on December 31, journalize the following entries: A. December 30, to record the payroll. B. December 30, 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, $48,000 is subject to unemployment compensation taxes 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: A. December 30, to record the payroll. B. January 5, to record the employer's payroll taxes on the payroll to be paid on January 5. Since it is a new fiscal year, all $780,000 in salaries is subject to unemplóyment compen- sation taxes.Explanation / Answer
Question 1) Journal entries.
on Dec 31
Salary expense - Sales dept -Debit $540,000
A) Salary expense - Ware house - Debit $155,000
Salary expense - Office - Debit $85,000
To Income tax Withholdings payable - Credit $160,000
To US Savings bonds - Credit $10,500
To Group insurance - Credit $9,000
To Net Salary payable - Credit $600,500
(recording of payroll entries along with deductions for December month)
Net Salary payable - Credit $600,500
To Cash- Credit $600,500
(recording of payment of made towards December month salary)
on Dec 31
Payroll tax expense - Debit $61,476
To Social security tax withholdings payable - Credit $46,800
($780,000*6%)
B) To Medicare tax withholdings - Credit $11,700
($780,000*1.5%)
To State Unemployment tax payable - Credit $2,592
($48,000*5.4%
To Federal Unemployment payable - Credit $384
($48,000*.08%)
(recording employer's portion of social security tax and Medicare tax and other payroll taxes on the payroll for December)
Social security tax withholdings payable - Debit $46,800
Medicare tax withholdings - Debit $11,700
State Unemployment tax payable - Debit $2,592
Federal Unemployment payable - Debit $384
To Cash - Credit $61,476
(recording of payment of tax withheld and payroll taxes for December month)
Question 2) Journal entries.
on Dec 30 Salary expense - Sales dept -Debit $540,000
Salary expense - Ware house - Debit $155,000
A) Salary expense - Office - Debit $85,000
To Income tax Withholdings payable - Credit $160,000
To US Savings bonds - Credit $10,500
To Group insurance - Credit $9,000
To Net Salary payable - Credit $600,500
(recording of payroll entries along with deductions for December month)
On Dec 30
Payroll tax expense - Debit $101,244
To Social security tax withholdings payable - Credit $46,800
($780,000*6%)
B) To Medicare tax withholdings - Credit $11,700
($780,000*1.5%)
To State Unemployment tax payable - Credit $42,120
($780,000*5.4%
To Federal Unemployment payable - Credit $624
($780,000*.08%)
(recording employer's portion of social security tax and Medicare tax and other payroll taxes on the payroll for December)
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