The following information about the payroll for the week ended December 30 was obtainedfrom the records of Pharrell Co.:Salaries:Deductions:$402,000Sales salariesIncome tax withheld$135,975Social security tax withheld46,620Warehouse salaries210,000Office salariesMedicare tax withheld165,00011,655Retirement savings$777,00017,094Group insurance13,986$225,330Tax rates assumed:Social security, 6%Medicare, 1.5%State unemployment (employer only), 5.4%Federal unemployment (employer only), 0.6% Instructions1. 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 onDecember 31. Of the total payroll for the last week of the year, $40,000 is subjectto unemployment compensation taxes.2. Assuming that the payroll for the last week of the year is to be paid on January 5 ofthe 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 onJanuary 5. Because it is a new fiscal year, all salaries are subject to unemploymentcompensation taxes.

Question
Asked Dec 18, 2019
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The following information about the payroll for the week ended December 30 was obtained
from the records of Pharrell Co.:
Salaries:
Deductions:
$402,000
Sales salaries
Income tax withheld
$135,975
Social security tax withheld
46,620
Warehouse salaries
210,000
Office salaries
Medicare tax withheld
165,000
11,655
Retirement savings
$777,000
17,094
Group insurance
13,986
$225,330
Tax rates assumed:
Social security, 6%
Medicare, 1.5%
State unemployment (employer only), 5.4%
Federal unemployment (employer only), 0.6%
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The following information about the payroll for the week ended December 30 was obtained from the records of Pharrell Co.: Salaries: Deductions: $402,000 Sales salaries Income tax withheld $135,975 Social security tax withheld 46,620 Warehouse salaries 210,000 Office salaries Medicare tax withheld 165,000 11,655 Retirement savings $777,000 17,094 Group insurance 13,986 $225,330 Tax rates assumed: Social security, 6% Medicare, 1.5% State unemployment (employer only), 5.4% Federal unemployment (employer only), 0.6%

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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, $40,000 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. Because it is a new fiscal year, all salaries are subject to unemployment
compensation taxes.
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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, $40,000 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. Because it is a new fiscal year, all salaries are subject to unemployment compensation taxes.

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Expert Answer

Step 1

Payroll: The total payment that a company is required to pay to its employee for the services received is called as payroll.

Payroll withholding deduction: The amounts which the employer withheld from employees’ gross pay to deduct taxes such as federal income tax, state income tax, local income tax, and social security tax are called payroll withholding deduction.

Employer payroll taxes: The taxes which the employer must pay to the employees with their salaries is called employer payroll taxes. Such taxes are not withheld from employees’ gross earnings but instead they are paid by employer.

Step 2

1. a

Prepare journal entry to record the payroll on December 30.

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Post Debit Credit Accounts and Explanation Date Ref (S) (S) December 30 Sales Salaries Expense 402,000 Warehouse Salaries Expense Office salaries Expense Social Security Taxes Payable (1) Medicare Taxes Payable (2) 210,000 165,000 46,620 11,655 135,975 Employees Income Taxes Payable Retirement Savings Payable 17,094 13,986 Group Insurance Payable Salaries Payable (To record salaries expense and payroll withholdings) 551,670

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Step 3

Working not...

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Calculate the amount of social security taxes payable as below: Social security taxes = $777,000× 6% = $46,620 (1) ..... Calculate the amount of Medicare taxes payable as below: Medicare taxes payable = $777,000 x1.5% %3D = $11,655 (2) ......

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