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Entries for payroll and payroll taxes The following information about the payroll for the week ended December 30 was obtained from the records of Saine Co.: Tax rates assumed: 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, $30,000 is subject to unemployment compensation taxes. 2. Assuming that the payroll for the last week of the year is to be paid on January 4 of the following fiscal year, journalize the following entries: A. December 30, to record the payroll. B. January 4, to record the employer’s payroll taxes on the payroll to be paid on January 4. Because it is a new fiscal year, all $1,185,000 in salaries is subject to unemployment compensation taxes.

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Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663

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Chapter
Section
BuyFindarrow_forward

Financial And Managerial Accounting

15th Edition
WARREN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337902663
Chapter 10, Problem 2PB
Textbook Problem
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Entries for payroll and payroll taxes

The following information about the payroll for the week ended December 30 was obtained from the records of Saine Co.:

Chapter 10, Problem 2PB, Entries for payroll and payroll taxes The following information about the payroll for the week ended , example  1

Tax rates assumed:

Chapter 10, Problem 2PB, Entries for payroll and payroll taxes The following information about the payroll for the week ended , example  2

Instructions

  1. 1. Assuming that the payroll for the last week of the year is to be paid on December 31, journalize the following entries:
    1. A. December 30, to record the payroll.
    2. 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, $30,000 is subject to unemployment compensation taxes.
  2. 2. Assuming that the payroll for the last week of the year is to be paid on January 4 of the following fiscal year, journalize the following entries:
    1. A. December 30, to record the payroll.
    2. B. January 4, to record the employer’s payroll taxes on the payroll to be paid on January 4. Because it is a new fiscal year, all $1,185,000 in salaries is subject to unemployment compensation taxes.

1.

A.

To determine

Journalize the entry to record the payroll on December 30.

Explanation of Solution

Working note 1: Calculate the amount of social security taxes payable as below:

  Social security taxes=$1,185,000×6%=$71,100

Working note 2: Calculate the amount of Medicare taxes payable as below:

  Medicare taxes payable=$1,185,000×1.5%=$17,775

  • ■ Sales salaries expense is an expense and it decreases equity value

2.

A.

To determine

Journalize the entry to record the payroll on December 30.

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