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Payroll entries Urban Window Company had gross wages of $320,000 during the week ended July 15. The amount of wages subject to social security tax was $320,000, while the amount of wages subject to federal and state unemployment taxes was $40,000. Tax rates are as follows: The total amount withheld from employee wages for federal taxes was $75,200. a. Journalize the entry to record the payroll for the week of July 15. b. Journalize the entry to record the payroll tax expense incurred for the week of July 15.

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Financial Accounting

15th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337272124

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BuyFindarrow_forward

Financial Accounting

15th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337272124
Chapter 11, Problem 14E
Textbook Problem
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Payroll entries

Urban Window Company had gross wages of $320,000 during the week ended July 15. The amount of wages subject to social security tax was $320,000, while the amount of wages subject to federal and state unemployment taxes was $40,000. Tax rates are as follows:

Chapter 11, Problem 14E, Payroll entries Urban Window Company had gross wages of 320,000 during the week ended July 15. The

The total amount withheld from employee wages for federal taxes was $75,200.

  1. a. Journalize the entry to record the payroll for the week of July 15.
  2. b. Journalize the entry to record the payroll tax expense incurred for the week of July 15.

a.

To determine

Journalize the entry to payroll for the week of July 15.

Explanation of Solution

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.

Prepare journal entry to record the payroll for the week of July 15.

DateAccounts and ExplanationPost RefDebit ($)Credit ($)
July 15Wages Expense 320,000 
   Social Security Taxes Payable (1)  19,200
Medicare Taxes Payable (2)4,800
Employee Federal Income Taxes Payable 75,200
Wages payable220,800
    (To record salaries expense and payroll withholdings)   

Table (1)

  • Wages expense is an expense and it decreases equity value...

b.

To determine

Journalize the payroll taxes expense incurred for the week of July 15.

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Chapter 11 Solutions

Financial Accounting
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