# Lemur Corp. is going to pay three employees a year-end bonus. The amount of the year-end bonus and the amount of federal income tax withholding are as follows. Lemur’s payroll deductions include FICA Social Security at 6.2%, FICA Medicare at 1.45%, FUTA at 0.6%, SUTA at 5.4%, federal income tax as previously shown, state income tax at 5% of gross pay, and 401(k) employee contributions at 2% of gross pay. Record the entry for the employee payroll on December 31.

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### Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685

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### Principles of Accounting Volume 1

19th Edition
OpenStax
Publisher: OpenStax College
ISBN: 9781947172685
Chapter 12, Problem 10PA
Textbook Problem
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## Lemur Corp. is going to pay three employees a year-end bonus. The amount of the year-end bonus and the amount of federal income tax withholding are as follows.Lemur’s payroll deductions include FICA Social Security at 6.2%, FICA Medicare at 1.45%, FUTA at 0.6%, SUTA at 5.4%, federal income tax as previously shown, state income tax at 5% of gross pay, and 401(k) employee contributions at 2% of gross pay.Record the entry for the employee payroll on December 31.

To determine

Introduction:

Payroll is the payment made by company to its employees. It includes employee’s salaries and wages, and their deduction towards taxes, benefits, and employer contribution.

To journalize:

The transactions relating to the employee payroll.

### Explanation of Solution

Record the employee payroll:

 Date Account Debit ($) Credit ($) December 31 Salaries Expense 23,000 FICA Social Security Tax Payable    (23,000×6.2%) 1,426 FICA Medicare Tax Payable    (23,000×1.45%) 333.50 FUTA Payable   (23,000×0.6%) 138 SUTA Payable   (23,000×5.4%) 1,242 Federal Income Tax 2,681 State Income Tax Payable    (23,000×5%) 1,150 401(k) Retirement Plan Payable    (23,000×2%) 460 Salaries Payable 15,569.50 (To record employee payroll for the month of December)

Table (1)

• Salaries expense is an expense and it is increased by \$23,000

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