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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

On September 30, Cody Company’s selected account balances are as follows:

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In general journal form, prepare the entries to record the following:

Oct. 15    Payment of liabilities for FICA taxes and the federal income tax.

31    Payment of liability for state unemployment tax.

31    Payment of liability for federal unemployment tax.

To determine

Journalize the given transactions.

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.

Journalize the given transactions.

DateAccount Title and explanationDebit ($)Credit ($)
October 15Employee federal income tax payable4,738.00 
 FICA-Social Security taxes payable ($6,770×6.2%)4,221.60 
 FICA-Medicare Taxes payable ($6,770×1.45%)987.32 
      Cash 9,946.92
 (To record  the issue of check for federal  tax deposit)  

Table (1)

  • Employee Federal income tax payable is a liability and there is a decrease in the value of liability. Hence, debit the employee Federal income tax payable by $1,015.00.
  • FICA tax – social and security tax payable is a liability and there is a decrease in the value of liability. Hence, debit the FICA tax – social and security tax payable by $419.74.
  • FICA tax – medical tax payable is a liability and there is a decrease in the value of liability

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