menu
bartleby
search
close search
Hit Return to see all results
close solutoin list

Journalize payroll tax The payroll register of Longboat Co. indicates $5,400 of social security withheld and $1,350 of Medicare tax withheld on total salaries of $90,000 for the period. Earnings of $10,000 are subject to state and federal unemployment compensation taxes at the federal rate of 0.6% and the state rate of 5.4%. Provide the journal entry to record the payroll tax expense for the period.

BuyFindarrow_forward

Financial Accounting

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

Solutions

Chapter
Section
BuyFindarrow_forward

Financial Accounting

15th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337272124
Chapter 11, Problem 5PEB
Textbook Problem
55 views

Journalize payroll tax

The payroll register of Longboat Co. indicates $5,400 of social security withheld and $1,350 of Medicare tax withheld on total salaries of $90,000 for the period. Earnings of $10,000 are subject to state and federal unemployment compensation taxes at the federal rate of 0.6% and the state rate of 5.4%.

Provide the journal entry to record the payroll tax expense for the period.

To determine

Journalize the payroll taxes expense for the period.

Explanation of Solution

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.

Prepare journal entry to record the employer payroll taxes expense.

DateAccounts and ExplanationPost RefDebit ($)Credit ($)
 Payroll Tax Expense (3) 7,350 
   Social Security Taxes Payable   5,400
Medicare Taxes Payable 1,350
Federal Unemployment Taxes Payable (1)60
State  Unemployment Taxes Payable (2)540
    (To record employer’s payroll taxes expense)   

Table (1)

  • Payroll tax expense is an expense and it decreases equity value. So, debit it by $7,350.
  • Social security taxes payable is a liability and it is increased. So, credit it by $5,400.
  • Medicare taxes payable is a liability and it is increased. So, credit it by $1,350.
  • Federal unemployment taxes payable is a liability and it is increased. So, credit it by $60.
  • State unemployment taxes payable is a liability and it is increased. So, credit it by $540.

 Working note (1):

Calculate the amount of Federal unemployment taxes payable as below:

  Federal Unemployment taxes payable=$10,000×0.6%=$60

 Working note (2):

Calculate the amount of State unemployment taxes payable as below:

  State Unemployment taxes payable=$10,000×5.4%=$540

 Working note (3):

Calculate the amount of payroll tax expense as below:

  Payroll tax expense=(Social security Taxes Payable )+ (Medicare Taxes Payable)

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Chapter 11 Solutions

Financial Accounting
Show all chapter solutions
add
Ch. 11 - Proceeds from notes payable On May 15, Maynard Co....Ch. 11 - Proceeds from notes payable On January 26, Nyree...Ch. 11 - Federal income tax withholding Tam Worldlys weekly...Ch. 11 - Federal income tax withholding Marsha Mellows...Ch. 11 - Employee net pay Tam Worldlys weekly gross...Ch. 11 - Employee net pay Marsha Mellows weekly gross...Ch. 11 - Journalize period payroll The payroll register of...Ch. 11 - Journalize period payroll The payroll register of...Ch. 11 - Journalize payroll tax The payroll register of...Ch. 11 - Journalize payroll tax The payroll register of...Ch. 11 - Vacation pay and pension benefits Fukushima...Ch. 11 - Vacation pay and pension benefits Regling Company...Ch. 11 - Estimated warranty liability EarlKeen Co. sold...Ch. 11 - Estimated warranty liability Quantas Industries...Ch. 11 - Quick ratio Nabors Company reported the following...Ch. 11 - Quick ratio Adieu Company reported the following...Ch. 11 - Current liabilities Bon Nebo Co. sold 25,000...Ch. 11 - Entries for notes payable Cosimo Enterprises...Ch. 11 - Entries for discounting notes payable Ramsey...Ch. 11 - Evaluating alternative notes A borrower has two...Ch. 11 - Entries for notes payable A business issued a...Ch. 11 - Entries for discounted note payable A business...Ch. 11 - Entries for notes payable Bull City Industries is...Ch. 11 - Current portion of long-term debt PepsiCo, Inc.,...Ch. 11 - Calculate payroll An employee earns 25 per hour...Ch. 11 - Calculate payroll Breakin Away Company has three...Ch. 11 - Summary payroll data In the following summary of...Ch. 11 - Payroll tax entries According to a summary of the...Ch. 11 - Payroll entries The payroll register for Gamble...Ch. 11 - Payroll entries Urban Window Company had gross...Ch. 11 - Payroll internal control procedures Big Howies Hot...Ch. 11 - Internal control procedures Daves Scooters is a...Ch. 11 - Accrued vacation pay A business provides its...Ch. 11 - Pension plan entries Yuri Co. operates a chain of...Ch. 11 - Defined benefit pension plan terms In a recent...Ch. 11 - Accrued product warranty Parker Manufacturing Co....Ch. 11 - Accrued product warranty General Motors...Ch. 11 - Contingent liabilities Several months ago, Ayers...Ch. 11 - Quick ratio Gmeiner Co. had the following current...Ch. 11 - Quick ratio The current assets and current...Ch. 11 - Liability transactions The following items were...Ch. 11 - Entries for payroll and payroll taxes The...Ch. 11 - Wage and tax statement data on employer FICA tax...Ch. 11 - Payroll register The following data for Throwback...Ch. 11 - Payroll accounts and year-end entries The...Ch. 11 - Liability transactions The following items were...Ch. 11 - Entries for payroll and payroll taxes The...Ch. 11 - Wage and tax statement data and employer FICA tax...Ch. 11 - Payroll register The following data for Flexco...Ch. 11 - Payroll accounts and year-end entries The...Ch. 11 - Selected transactions completed by Kornett Company...Ch. 11 - Ethics in Action Tonya Latirno is a staff...Ch. 11 - Ethics in Action Marvin Turner was discussing...Ch. 11 - Communication WBM Motorworks is a manufacturer of...Ch. 11 - Recognizing pension expense The annual examination...Ch. 11 - Contingent liabilities Reynolds American, Inc.,...

Additional Business Textbook Solutions

Find more solutions based on key concepts
Show solutions add
Discuss some of the techniques available to reduce risk exposure.

Fundamentals of Financial Management (MindTap Course List)

Why isnt trade among countries like a game with some winners and some losers?

Brief Principles of Macroeconomics (MindTap Course List)

It is frequently stated that the one purpose of the preemptive right is to allow individuals to maintain their ...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

How do the receipts and expenditures of a state-operated lottery affect GDP?

Economics: Private and Public Choice (MindTap Course List)