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The information for Best Sports Company, shown in the chart on the next page, is available from Best Sports’ time records and employees’ individual earnings records for the pay period ended December 29. Taxable earnings for Social Security are based on the first $113,700. Taxable earnings for Medicare are based on all earnings. Taxable earnings for federal and state unemployment are based on the first $7,000. The company does not pay for overtime hours. Required 1. Complete the payroll register using a Social Security tax rate of 6.2 percent and a Medicare tax rate of 1.45 percent. Concerning Other Deductions, AR refers to Accounts Receivable and UW refers to United Way. Begin payroll checks in the payroll register with No. 2914. 2. Prepare the general journal entry to record the payroll. The firm’s general ledger contains a Salary Expense account and a Salaries Payable account. 3. Prepare the general journal entry to pay the payroll. Assume that funds for this payroll have been transferred to Cash—Payroll Bank Account and that this entry has been made.

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College Accounting (Book Only): A ...

12th Edition
Cathy J. Scott
Publisher: Cengage Learning
ISBN: 9781305084087

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BuyFindarrow_forward

College Accounting (Book Only): A ...

12th Edition
Cathy J. Scott
Publisher: Cengage Learning
ISBN: 9781305084087
Chapter 7, Problem 4PB
Textbook Problem
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The information for Best Sports Company, shown in the chart on the next page, is available from Best Sports’ time records and employees’ individual earnings records for the pay period ended December 29.

Chapter 7, Problem 4PB, The information for Best Sports Company, shown in the chart on the next page, is available from Best

Taxable earnings for Social Security are based on the first $113,700. Taxable earnings for Medicare are based on all earnings. Taxable earnings for federal and state unemployment are based on the first $7,000. The company does not pay for overtime hours.

Required

  1. 1. Complete the payroll register using a Social Security tax rate of 6.2 percent and a Medicare tax rate of 1.45 percent. Concerning Other Deductions, AR refers to Accounts Receivable and UW refers to United Way. Begin payroll checks in the payroll register with No. 2914.
  2. 2. Prepare the general journal entry to record the payroll. The firm’s general ledger contains a Salary Expense account and a Salaries Payable account.
  3. 3. Prepare the general journal entry to pay the payroll. Assume that funds for this payroll have been transferred to Cash—Payroll Bank Account and that this entry has been made.

1.

To determine

Complete Company B’s payroll register.

Explanation of Solution

Payroll:

Payroll refers to the total amount that is required to be paid by the company to its employees during a week, month or other period. It is the financial record of the wages and bonus, net pay, salary and deductions of a company’s employees.

Complete the Company B’s payroll register.

2.

To determine

Journalize the transaction to record the payroll.

3.

To determine

Journalize the transaction to record the payment of wages by assuming that the company has transferred funds from payroll to its cash- payroll bank account.

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Chapter 7 Solutions

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