ross salaries earned by employees (December 29-31) ncome taxes withheld from emp
ID: 2612132 • Letter: R
Question
ross salaries earned by employees (December 29-31) ncome taxes withheld from employees (December 29-31) FICA taxes withheld from employees (December 29-31) $7,200 1,100 420 $5.680 et payment to employees (made on December 31) The employees were paid $5,680 on December 31, 2015, but the withholdings have not yet been remitted nor have the matching employer FICA contributions Required: Part a. Compute the total payroll costs relating to the period from December 29-31. (Assume $560 in total unemployment taxes.) Part b. Show December 31 to adjust for salaries and wages relating to December 29-31 2015. Part c. Show the accounting equation effects and give the journal entries on December 31 to adjust for payroll taxes relating to December 29-31, 2015 the accounting equation effects and give the journal entries onExplanation / Answer
1. Calculaiton of Payrolll taxes payable.
Gross Salary
FICA (Employee)
(1)
Federal Withholding Tax (2)
Net Pay
FICA Tax Employer (3)
State & Federal Unemployment taxes payable (Employer)
(4)
Total Payroll Taxes (1+2+3+4)
7,200
420
1,100
5,680
420
560
2,500
2. Journal Entries
Date
Account
Debit
Credit
Salaries & Wages Expense
TO FICA Tax Payable
TO Federal income tax payable
TO Salary & Wages Payable
7,200
420
1,100
5,680
Payroll Tax Expense
TO FICA Tax Payable (Employer)
TO State & Federal Unemployment Tax Payable
980
420
560
NOTE:
A. State & Federal unemployment taxes are assumed to be $560 since the rates of same are not available.
B. FICA Taxes are paid in equal proportion by employee & employer. Therefore, $420 is payable by emmployer also.
C. First journal entry is related to salary and wages and second journal entry is for payroll taxes by employer.
Gross Salary
FICA (Employee)
(1)
Federal Withholding Tax (2)
Net Pay
FICA Tax Employer (3)
State & Federal Unemployment taxes payable (Employer)
(4)
Total Payroll Taxes (1+2+3+4)
7,200
420
1,100
5,680
420
560
2,500
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