The following information about the payroll for the week ended December 30 was obtained from the records of Boltz Co.:Salaries: Deductions: Sales salaries$540,000Income tax withheld$160,000Warehouse salaries155,000U.S. savings bonds10,500Office salaries85,000Group insurance9,000 $780,000       Tax rates assumed:Social security6%State unemployment (employer only)5.4%Medicare1.5%Federal unemployment (employer only)0.8%  Required:1.Assuming that the payroll for the last week of the year is to be paid on December 31, journalize the following entries (refer to the Chart of Accounts for exact wording of account titles): 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 (refer to the Chart of Accounts for exact wording of account titles): a. On page 11 of the journal: December 30, to record the payroll. b. On page 12 of the journal: 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 unemployment compensation taxes.

Question
Asked Oct 1, 2019
The following information about the payroll for the week ended December 30 was obtained from the records of Boltz Co.:
Salaries:   Deductions:  
Sales salaries $540,000 Income tax withheld $160,000
Warehouse salaries 155,000 U.S. savings bonds 10,500
Office salaries 85,000 Group insurance 9,000
  $780,000    
 
       
Tax rates assumed:
Social security 6% State unemployment (employer only) 5.4%
Medicare 1.5% Federal unemployment (employer only) 0.8%
 
  Required:
1. Assuming that the payroll for the last week of the year is to be paid on December 31, journalize the following entries (refer to the Chart of Accounts for exact wording of account titles):
  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 (refer to the Chart of Accounts for exact wording of account titles):
  a. On page 11 of the journal: December 30, to record the payroll.
  b. On page 12 of the journal: 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 unemployment compensation taxes.
check_circleExpert Solution
Step 1

1a.

Prepare journal entry to record the payroll on December 30.

Post
Debit
Credit
Date
Accounts and Explanation
(S)
(S)
Ref
December 30 Sales Salaries Expense
540,000
Warehouse Salaries Expense
155,000
Office salaries Expense
85,000
Social Security Taxes Payable
46,800
Medicare Taxes Payable
11,700
Employees Income Taxes Payable
160,000
Bond Deductions Payable
10,500
Group Insurance Payable
9,000
Salaries Payable
542,000
(To record salaries expense and
payroll withholdings)
Working notes
Calculate the amount of social security taxes payable as below:
Social security taxes payable $780,000x 6%
S46,800
Calculate the amount of Medicare taxes payable as below:
Medicare taxes payable $780,000x1.5 %
$11,700
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Post Debit Credit Date Accounts and Explanation (S) (S) Ref December 30 Sales Salaries Expense 540,000 Warehouse Salaries Expense 155,000 Office salaries Expense 85,000 Social Security Taxes Payable 46,800 Medicare Taxes Payable 11,700 Employees Income Taxes Payable 160,000 Bond Deductions Payable 10,500 Group Insurance Payable 9,000 Salaries Payable 542,000 (To record salaries expense and payroll withholdings) Working notes Calculate the amount of social security taxes payable as below: Social security taxes payable $780,000x 6% S46,800 Calculate the amount of Medicare taxes payable as below: Medicare taxes payable $780,000x1.5 % $11,700

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Step 2

1b.

Prepare journal entry to record employer’s payroll taxes expense on December 30.

Post Debit
Credit
Accounts and Explanation
Date
Ref
(S)
(S)
December 30 Payroll Tax Expense
61,476
Social Security Taxes Payable
46,800
Medicare Taxes Payable
11,700
Federal Unemployment Taxes Payable
384
State Unemployment Taxes Payable
2,592
(To record employer's payroll taxes
expense)
Working notes
Calculate the amount of Federal unemployment taxes as below:
Federal Unemployment taxes $48,000 x 0.8%
= $384
Calculate the amount of State unemployment taxes as below:
State Unemployment taxes payable $48,000x5.49%
- $2 ,592
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Image Transcriptionclose

Post Debit Credit Accounts and Explanation Date Ref (S) (S) December 30 Payroll Tax Expense 61,476 Social Security Taxes Payable 46,800 Medicare Taxes Payable 11,700 Federal Unemployment Taxes Payable 384 State Unemployment Taxes Payable 2,592 (To record employer's payroll taxes expense) Working notes Calculate the amount of Federal unemployment taxes as below: Federal Unemployment taxes $48,000 x 0.8% = $384 Calculate the amount of State unemployment taxes as below: State Unemployment taxes payable $48,000x5.49% - $2 ,592

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Step 3

2a.

Prepare journal entry to record the payroll on ...

Post
Debit
Credit
Accounts and Explanation
Date
Ref
(S)
(S)
December 30 Sales Salaries Expense
540,000
Warehouse Salaries Expense
155,000
Office salaries Expense
85,000
Social Security Taxes Payable
46,800
Medicare Taxes Payable
11,700
Employees Income Taxes Payable
160,000
Bond Deductions Payable
10,500
Group Insurance Payable
9,000
Salaries Payable
542,000
(To record salaries expense and
payroll withholdings)
Working notes:
Calculate the amount of social security taxes payable as below:
Social security taxes $780,000 x6%
=$46,800
Calculate the amount of Medicare taxes payable as below
Medi care taxes payable $780,000x 1.5%
=$11,700
help_outline

Image Transcriptionclose

Post Debit Credit Accounts and Explanation Date Ref (S) (S) December 30 Sales Salaries Expense 540,000 Warehouse Salaries Expense 155,000 Office salaries Expense 85,000 Social Security Taxes Payable 46,800 Medicare Taxes Payable 11,700 Employees Income Taxes Payable 160,000 Bond Deductions Payable 10,500 Group Insurance Payable 9,000 Salaries Payable 542,000 (To record salaries expense and payroll withholdings) Working notes: Calculate the amount of social security taxes payable as below: Social security taxes $780,000 x6% =$46,800 Calculate the amount of Medicare taxes payable as below Medi care taxes payable $780,000x 1.5% =$11,700

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