Question

It is August 2020. You are calculating the monthly paycheck, including employee withholding, and employer payroll related expenses for Bonnie Bigwig. Her pay through July is $110,000. Her August gross pay $20,000. Her Federal income tax withholding is at the 25% rate, her state withholding is at the 5% rate. (Ignore local income tax.) Her health insurance (all paid by the company) is $1,500 / month. She contributes $1,000 / month to the United Way. Give the journal entry to pay Bonnie. Also, give the journal entry to record the employer payroll related expenses.

Answer 1

Payroll entries :

In general, Payroll entries square measure the entries that records the compensation paid to the workers.

JOURNAL ENTRY FOR PAYROLL EXPENSES:

1. accumulated payroll entry

Direct labor expense

Salary account (current month salary)

To accumulated pay account (gross salary)

To accumulated payroll taxes (Here, it's ignored)

2. pay paid to worker

accumulated pay account

To brokerage account

A. JOURNAL ENTRY TO PAY fair : (DEBIT AMOUNT) (CREDIT AMOUNT)

Accrued pay account $130500 -

To brokerage account - $130500

B. JOURNAL ENTRY FOR PAYROLL EXPENSES :

Health insurance account $1500 -

Salary account ($110000 + $20000) $130000 -

To contribution - $1000

To accumulated pay account - $130500

NOTE :

Bonnie contributes $1000/ month to the United manner. The contribution ought to be subtracted from the pay.

please upvote ,comment incase any doubt , feel free to comment ,thank you