The totals line from Nix Company’s payroll register for the week ended March 31,

Question

The totals line from Nix Company’s payroll register for the week ended March 31, 20--, is as follows:

Payroll taxes are imposed as follows: Social Security tax, 6.2%; Medicare tax, 1.45%; FUTA tax, 0.6%; and SUTA tax, 5.4%.

Required:

PAYROLL REGISTER FOR THE PERIOD ENDED March 31, 20-- EARNINGS TAXABLE EARNINGS DEDUCTIONS NAME EMPLOYEE NUMBER ALLOWANCES MARIT. STATUS REGULAR OVERTIME TOTAL CUM. TOTAL UNEMPL. COMP. SOC. SEC. FED. INC. TAX SOC. SEC. TAX MEDICARE TAX HEALTH INSUR. LIFE INSUR. OTHER TOTAL NET PAY CK. NO. 21 Totals 5,400.00 100.00 5,500.00 71,500.00 5,000.00 5,500.00 500.00 341.00 79.75 165.00 200.00 1,285.75 4,214.25 21

Explanation / Answer

Note: Since it is not given where the workers' compensation insurance premium was debited at the time of payment, the $420 is assumed to have been debited to insurance expense and hence at year-end $20 excess is transferred from insurance expense to prepaid insurance. In case at the time of payment $420 was debited to prepaid insurance, the adjusting entry would be a debit to insurance expense and credit to prepaid insurance $400.  

No. Date Account Titles and Explanations Debit Credit 1.a. Mar. 31, 20-- Salaries and wages expense 5500 Employee federal income tax payable 500 Social security tax payable 341 Medicare tax payable 79.75 Health insurance payable 165 Life insurance payable 200 Cash 4214.25 (To record payment of March payroll) 1.b. Mar. 31, 20-- Payroll taxes expense 720.75 Social security tax payable 341 Medicare tax payable 79.75 FUTA tax payable 30 SUTA tax payable 270 (To record employer's payroll taxes) 2.a. Apr. 15, 20-- Employee federal income tax payable 3000 Social security tax payable 2690 Medicare tax payable 629.5 Cash 6319.5 (To record payment of liabilities) 2.b. Apr. 30, 20-- FUTA tax payable 550 Cash 550 (To record payment of liabilities) 2.c. Apr. 30, 20-- SUTA tax payable 4780 Cash 4780 (To record payment of liabilities) 3 Dec. 31, 20-- Prepaid insurance 20 Insurance expense 20 (To record overpayment of insurance premium)

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