Question

In: Accounting

The following information about the payroll for the week ended December 30 was obtained from the...

The following information about the payroll for the week ended December 30 was obtained from the records of Boltz Co.:

Salaries: Deductions:
Sales salaries $325,000 Income tax withheld $116,600
Warehouse salaries 200,000 U.S. savings bonds 14,674
Office salaries 142,000 Group insurance 12,006
$667,000
Tax rates assumed:
Social security 6% State unemployment (employer only) 5.4%
Medicare 1.5% Federal unemployment (employer only) 0.8%
Required:
1. Assuming that the payroll for the last week of the year is to be paid on December 31, journalize the following entries (refer to the Chart of Accounts for exact wording of account titles):
a. December 30, to record the payroll.
b. December 30, to record the employer’s payroll taxes on the payroll to be paid on December 31. Of the total payroll for the last week of the year, $32,000 is subject to unemployment compensation taxes.
2. Assuming that the payroll for the last week of the year is to be paid on January 5 of the following fiscal year, journalize the following entries (refer to the Chart of Accounts for exact wording of account titles):
On page 11 of the journal: December 30, to record the payroll.
On page 12 of the journal: January 5, to record the employer's payroll taxes on the payroll to be paid on January 5. Since it is a new fiscal year, all $667,000 in salaries is subject to unemployment compensation taxes.

Chart of Accounts

CHART OF ACCOUNTS
Boltz Co.
General Ledger
ASSETS
110 Cash
111 Accounts Receivable
112 Interest Receivable
113 Notes Receivable
115 Inventory
116 Supplies
118 Prepaid Insurance
120 Land
123 Building
124 Accumulated Depreciation-Building
125 Office Equipment
126 Accumulated Depreciation-Office Equipment
LIABILITIES
210 Accounts Payable
213 Interest Payable
214 Notes Payable
215 Salaries Payable
216 Social Security Tax Payable
217 Medicare Tax Payable
218 Employees Income Tax Payable
220 Group Insurance Payable
221 Bond Deductions Payable
222 Union Dues Payable
223 Retirement Savings Deductions Payable
224 Federal Unemployment Tax Payable
225 State Unemployment Tax Payable
226 Vacation Pay Payable
227 Unfunded Pension Liability
EQUITY
310 Common Stock
311 Retained Earnings
312 Dividends
313 Income Summary
REVENUE
410 Sales
610 Interest Revenue
EXPENSES
510 Cost of Goods Sold
520 Sales Salaries Expense
521 Warehouse Salaries Expense
522 Office Salaries Expense
524 Depreciation Expense-Building
525 Delivery Expense
526 Repairs Expense
529 Selling Expenses
531 Rent Expense
532 Depreciation Expense-Office Equipment
533 Insurance Expense
534 Supplies Expense
535 Payroll Tax Expense
536 Vacation Pay Expense
537 Pension Expense
538 Cash Short and Over
540 Miscellaneous Expense
710 Interest Expense

Solutions

Expert Solution

Date Accounts Debit Credit
1a Dec 30 Sales Salaries Expense 325000
Warehouse Salaries Expense 200000
Office Salaries Expense 142000
Employee Income Tax payable 116600
Social Security Tax payable (667000*6%) 40020
Medicare Tax payable (667000*1.5%) 10005
Bond Deductions Payable 14674
Group Insurance Payable 12006
Salaries Payable $473695
1b Dec 30 Payroll Tax Expense $52009
Social Security tax payable 40020
Medicare Tax Payable $10005
State Unemployment tax payable (32000 * 5.4%) $1728
Federal unemployment tax payable (32000 * 0.8%) $256
2a Dec 30 Sales Salaries Expense 325000
Warehouse Salaries Expense 200000
Office Salaries Expense 142000
Employee Income Tax payable 116600
Social Security Tax payable (667000*6%) 40020
Medicare Tax payable (667000*1.5%) 10005
Bond Deductions Payable 14674
Group Insurance Payable 12006
Salaries Payable $473695
2b Jan 5 Payroll Tax Expense $91379
Social Security tax payable 40020
Medicare Tax Payable $10005
State Unemployment tax payable (667000 * 5.4%) $36018
Federal unemployment tax payable (32000 * 0.8%) 5336

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