a)
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 are called employer payroll taxes. Such taxes are not withheld from employees’ gross earnings but instead they are paid by employer.
To Journalize: The entry to payroll for the week of February 14.
b)
To Journalize: The payroll taxes expense incurred for the week of February 14.
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Financial & Managerial Accounting
- Payment and distribution of payroll The general ledger of Berskshire Mountain Manufacturing Inc. showed the following credit balances on January 15: Direct labor earnings amounted to 10,500 from January 16 to 31. Indirect labor was 5,700, and sales and administrative salaries for the same period amounted to 3,800. All wages are subject to FICA, FUTA, state unemployment taxes, and 10% income tax withholding. Required: 1. Prepare the journal entries for the following: a. Recording the payroll. b. Paying the payroll. c. Recording the employers payroll tax liability. d. Distributing the payroll costs for January 1631. 2. Prepare the journal entry to record the payment of the amounts due for the month to the government for FICA and income tax withholdings. 3. Calculate the amount of total earnings for the period from January 1 to 15. 4. Should the same person be responsible for computing the payroll, paying the payroll and making the entry to distribute the payroll? Why or why not?arrow_forwardPayroll Taxes Hernandez Builders has a gross payroll for January amounting to $500,000. The following amount have been withheld: Also, the federal unemployment tax rate is 6.2% and applies to all but $50,000 of the gross payroll. Required: 1. What is the amount of net pay recorded by Hernandez? 2. Prepare the journal entries to record the payroll.arrow_forwardPayroll Taxes Sids Grocery Store has 100 employees who earn a wage of $18.75 per hour. Each of Sids employees has worked a total of 160 hours over the month of July. At the time of recording Julys monthly payroll, the following amounts have been withheld: Also, the unemployment tax rate is 2% and applies to all but $30,000 of the gross payroll. Required: 1. What is the amount of net pay recorded by Sids? 2. Make the journal entries to record the payroll.arrow_forward
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