Francisco Company has 10 employees, each of whom earns $3,000 per month and is p
ID: 2595787 • Letter: F
Question
Francisco Company has 10 employees, each of whom earns $3,000 per month and is paid on the last day of each month. All 10 have been employed continuously at this amount since January 1. On March 1, the following accounts and balances exist in its general ledger a. FICA-Social Security Taxes Payable, $3,720; FICA-Medicare Taxes Payable, $870. (The balances of these accounts represent total liabilities for both the employer's and employees' FICA taxes for the February payroll only) b. Employces' Federal Income Taxes Payable, $7,500 (liability for February only) c. Federal Unemployment Taxes Payable, $360 (liability for January and February together). d. State Unemployment Taxes Payable, $2,400 (iability for January and February together), During March and April, the company had the following payroll transactions. Mar. 15 Issued check payable to switt Bank, a tederal depository bank authorized to accept employers' payments of FICA taxes and employee income tax withholdinga. The $12,090 check is in payment of the February rICA and employee income taxes. 31 Recorded the journal entry for the March salaries payable. Then recorded the cash payment of the March payroll (the company issued checks payable to each employee in payment of the March payroll). The payroll register shovs the following summary totals for the March pay period Salaries office Salaries Salaries 12,000 18,000 $ Federal Income Taxes Shop Gross pay PICA Taxes* Net Pay 30,0001,860 7,500$20,205 S 435Explanation / Answer
Journal entries for the month of march and April
Date
General journal
Debit
Credit
Mar-15
FICA-social security taxes payable
3,720
FICA-Medicare taxes payable
870
Employees federal income taxes payable
7,500
Cash
12,090
Mar-31
office salaries expenses
12,000
shop salaries expenses
18,000
FICA—Medicare taxes payable
435
FICA—Social sec. taxes payable
1,860
Employee federal income taxes payable
7,500
salaries payable
20,205
Mar-31
Salaries payable
20,205
Cash
20,205
Mar-31
Payroll taxes expense
2,755
FICA—Medicare taxes payable
435
FICA—Social sec. taxes payable
1,860
Federal unemployment taxes payable(1000*10*.6%)
60
State unemployment taxes payable (1000*10*4%)
400
(Amount earned through =2*3000=6000)(Subject to SUTA/FUTA in March = $7,000 - $6000 = $1,000)
Apr-15
FICA—Social sec. taxes payable
3,720
FICA—Medicare taxes payable 812
870
Employee fed. inc. taxes payable
7,500
cash
12,090
Apr-15
State unemployment taxes payable (2400+400)
2,800
cash
2,800
Apr-30
Federal unemployment taxes payable (60+360)
420
cash
420
Apr-30
No journal entry required
Date
General journal
Debit
Credit
Mar-15
FICA-social security taxes payable
3,720
FICA-Medicare taxes payable
870
Employees federal income taxes payable
7,500
Cash
12,090
Mar-31
office salaries expenses
12,000
shop salaries expenses
18,000
FICA—Medicare taxes payable
435
FICA—Social sec. taxes payable
1,860
Employee federal income taxes payable
7,500
salaries payable
20,205
Mar-31
Salaries payable
20,205
Cash
20,205
Mar-31
Payroll taxes expense
2,755
FICA—Medicare taxes payable
435
FICA—Social sec. taxes payable
1,860
Federal unemployment taxes payable(1000*10*.6%)
60
State unemployment taxes payable (1000*10*4%)
400
(Amount earned through =2*3000=6000)(Subject to SUTA/FUTA in March = $7,000 - $6000 = $1,000)
Apr-15
FICA—Social sec. taxes payable
3,720
FICA—Medicare taxes payable 812
870
Employee fed. inc. taxes payable
7,500
cash
12,090
Apr-15
State unemployment taxes payable (2400+400)
2,800
cash
2,800
Apr-30
Federal unemployment taxes payable (60+360)
420
cash
420
Apr-30
No journal entry required
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