27th Edition
WARREN + 5 others
ISBN: 9781337272094




27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Summary payroll data

In the following summary of data for a payroll period, some amounts have been intentionally omitted:

1. At regular rate ?
2. At overtime rate $80,000
3. Total earnings ?
4. Social security tax 32,400
5. Medicare tax 8,100
6. Income tax withheld 135,000
7. Medical insurance 18.900
8. Union dues ?
9. Total deductions 201,150
10. Net amount paid 338,850
Accounts debited:  
11. Factory Wages 285,000
12. Sales Salaries ?
13. Office Salaries 1 20,000
  1. a. Calculate the amounts omitted in lines (1), (3), (8), and (12).
  2. b. Journalize the entry to record the payroll accrual.
  3. c. Journalize the entry to record the payment of the payroll.


To determine

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.

To calculate: Omitted amounts


Calculate the omitted amounts in line (1), (3), (8), and (12).

  • Calculate the amount of total earnings (3).

Total earnings(3)=Netamountpaid+Totaldeductions=$338,850 + $201,150 =$540,000

  • Calculate the amount of regular (1).

Regular(1)=Total earningsOvertime=$540,000$80,000 =$460,000

  • Calculate the amount of union dues (8).

Union dues (8)=Total deductions(Socialsecuritytax+Medicaretax


To determine

To Journalize: The entry to record payroll accrual.


To determine

To Journalize: The entry to record the payment of payroll.

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