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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

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Chapter
Section
BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

CHALLENGE PROBLEM

This problem challenges you to apply your cumulative accounting knowledge to move a step beyond the material in the chapter.

Irina Company pays its employees weekly. The last pay period for 20-1 was on December 28. From December 28 through December 31, the employees earned $1,754, so the following adjusting entry was made:

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The first pay period in 20-2 was on January 4. The totals line from Irina Company’s payroll register for the week ended January 4, 20-2, was as follows:

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REQUIRED

1. Prepare the journal entry for the payment of the payroll on January 4, 20-2.

2. Prepare T accounts for Wages and Salaries Expense and Wages and Salaries Payable showing the beginning balance, January 4, 20-2. entry, and ending balance as of January 4, 20-2.

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1.

To determine

Prepare the journal entry for the payment of the payroll on January 4, 20-2.

Explanation

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.

DateAccount Title and explanationPost. refDebit ($)Credit ($)
January 4Wages and Salaries Payable 1,754.00 
 Wages and Salaries expense 1,596.00 
 Employee federal income tax payable  242.00
 FICA-Social Security taxes payable   207.70
 FICA-Medicare Taxes payable  48.58
 Health insurance premium payable  50.00
 United way contributions payable  80.00
 Cash  2,721.72
 (To record the payroll for the week ended January 4)   

Table (1)

  • Wages and Salaries payable is a liability and there is a decrease in the value of liability...

2.

To determine

Prepare T accounts for Wages and Salaries Expense and Wages and Salaries Payable showing the beginning balance, January 4, 20-2, entry, and ending balance as of January 4, 20-2.

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