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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

Signature Company’s partial payroll register for the week ended January 7 is as follows:

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Assume that the payroll is subject to an employer’s Social Security tax of 6.2 percent on the first $118,500 and a Medicare tax of 1.45 percent on all earnings. Also assume that the federal unemployment tax is 0.6 percent, and that the state unemployment tax is 5.4 percent of the first $7,000. Prepare the entry in general journal form to record the payroll tax expense.

To determine

Prepare journal entry to record the payroll tax expense.

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.

Prepare journal entry to record the payroll tax expense:

DateAccount Title and explanationDebit ($)Credit ($)
January 7Payroll tax expense653.15 
 

     FICA-Social Security taxes payable

     ($4,785×0.062)

 296.67
 

    FICA-Medicare Taxes payable

    ($4,785×0.0145)

 69

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