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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, Hilltop Company’s selected payroll accounts are as follows:

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Prepare general journal entries to record the following:

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To determine

Prepare journal entry to record 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.

Prepare journal entry to record the given transactions.

DateAccount Title and explanationDebit ($)Credit ($)
October 15Employee federal income tax payable3,210.85 
 FICA-Social Security taxes payable [$1,876.08+$1,876.08]3,752.16 
 FICA-Medicare Taxes payable [$438.76+$438.76]877.52 
      Cash 7,840.53
 (To record the issuance 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 $3,210.18.
  • 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 $3,752.16.
  • FICA tax – medical tax payable is a liability and there is a decrease in the value of liability

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