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

On January 14, at the end of the second week of the year, the totals of Castle Company’s payroll register showed that its store employees’ wages amounted to $33,482 and that its warehouse wages amounted to $13,560. Withholdings consisted of federal income taxes, $5,110; employer’s Social Security taxes at the rate of 6.2 percent; and employees’ Social Security taxes at a rate of 6.2 percent. Both the employer’s and employees’ Social Security taxes are based on the first $113,700, and no employee has reached the limit. Additional withholdings were Medicare taxes at the rate of 1.45 percent on all earnings and charitable contributions withheld, $845. a. Calculate the amount of Social Security and Medicare taxes to be withheld and write the general journal entry to record the payroll. Round answers to two decimal places. b. Write the general journal entry to record the employer’s payroll taxes assuming that the federal unemployment tax is 0.6 percent of the first $7,000, that the state unemployment tax is 5.4 percent of the same base, and that no employee has surpassed the $7,000 limit.

BuyFindarrow_forward

College Accounting (Book Only): A ...

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

Solutions

Chapter
Section
BuyFindarrow_forward

College Accounting (Book Only): A ...

12th Edition
Cathy J. Scott
Publisher: Cengage Learning
ISBN: 9781305084087
Chapter 8, Problem 2E
Textbook Problem
49 views

On January 14, at the end of the second week of the year, the totals of Castle Company’s payroll register showed that its store employees’ wages amounted to $33,482 and that its warehouse wages amounted to $13,560. Withholdings consisted of federal income taxes, $5,110; employer’s Social Security taxes at the rate of 6.2 percent; and employees’ Social Security taxes at a rate of 6.2 percent. Both the employer’s and employees’ Social Security taxes are based on the first $113,700, and no employee has reached the limit. Additional withholdings were Medicare taxes at the rate of 1.45 percent on all earnings and charitable contributions withheld, $845.

  1. a. Calculate the amount of Social Security and Medicare taxes to be withheld and write the general journal entry to record the payroll. Round answers to two decimal places.
  2. b. Write the general journal entry to record the employer’s payroll taxes assuming that the federal unemployment tax is 0.6 percent of the first $7,000, that the state unemployment tax is 5.4 percent of the same base, and that no employee has surpassed the $7,000 limit.

1.

To determine

Compute the social security tax that is being withheld and journalize the given transaction.

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.

DateAccount Title and explanationDebit ($)Credit ($)
January 14Salaries expense33,482.00 
 Warehouse wages  expense 13,560.00 
 Employee federal income tax payable 5,110.00
 FICA-Social Security taxes payable (1)   2,916.60
 FICA-Medicare Taxes payable (2) 682.11
 Employee’s charitable contribution payable  845.00
 Wages payable  37,488.29
 (To record payroll for the week ended January 14.)  

Table (1)

  • Salaries expense is an expense account and it is increased. Hence, debit salaries expense with $33,482.00.
  • Warehouse wages expense is an expense account and it is increased. Hence, debit warehouse wages expense with $13,560.00
  • Employee Federal income tax payable is a liability and there is an increase in the value of liability. Hence, credit the employee Federal income tax payable by $5,110.00.
  • FICA tax – social and security tax payable is a liability and there is an increase in the value of liability. Hence, credit the FICA tax – social and security tax payable by $2,916.60.
  • FICA tax – medical tax payable is a liability and there is an increase in the value of liability...

2.

To determine

Journalize the given transaction.

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 8 Solutions

College Accounting (Book Only): A Career Approach
Show all chapter solutions
add
Ch. 8 - Describe the journal entry to: a. Record the...Ch. 8 - Explain the deposit requirement for federal...Ch. 8 - What is the purpose of Form 941? How often is it...Ch. 8 - How many copies are made of a Form W-2? Who uses...Ch. 8 - What is the purpose of Form 940? How often is it...Ch. 8 - Generally, what is the time schedule for payment...Ch. 8 - Explain the advantage of establishing a tax...Ch. 8 - Explain how payroll fraud can be prevented.Ch. 8 - Signature Companys partial payroll register for...Ch. 8 - On January 14, at the end of the second week of...Ch. 8 - Go Systems had the following payroll data for...Ch. 8 - The information on earnings and deductions for the...Ch. 8 - Selected columns of Envirocon Companys payroll...Ch. 8 - On September 30, Cody Companys selected account...Ch. 8 - On September 30, Hilltop Companys selected payroll...Ch. 8 - Great Manufacturing Company received and paid a...Ch. 8 - Mooney Labs had the following payroll for the week...Ch. 8 - Complete Accounting Services has the following...Ch. 8 - For the third quarter of the year, Johnson...Ch. 8 - Lynden Company has the following balances in its...Ch. 8 - Jacks Lawn Service Company has the following...Ch. 8 - Kovarik Company had the following payroll for the...Ch. 8 - Kays Agency has the following payroll information...Ch. 8 - For the third quarter of the year, Barney...Ch. 8 - Grande Company has the following balances in its...Ch. 8 - Sharons Dance Studio has the following information...Ch. 8 - TruGreen is the worlds largest lawn and landscape...Ch. 8 - Between the end of one month and the 15th day of...

Additional Business Textbook Solutions

Find more solutions based on key concepts
Show solutions add
What is an activity dictionary?

Managerial Accounting: The Cornerstone of Business Decision-Making

Define an internal transaction and provide an example.

College Accounting (Book Only): A Career Approach

Identify the general categories of products.

Foundations of Business (MindTap Course List)

What are some actions that stockholders can take to ensure that managements and stockholders interests are alig...

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

How do households dissave?

Economics For Today