Question

The payroll register for Schmidt Company for the week ended April 29 indicated the following:

Salaries	$1,440,000
Social security tax withheld	86,400
Medicare tax withheld	21,600
Federal income tax withheld	288,000

In addition, state and federal unemployment taxes were computed at the rate of 5.4% and 0.6%, respectively, on $244,000 of salaries.

Required:

a.	Journalize the entry to record the payroll for the week of April 29.*
b.	Journalize the entry to record the payroll tax expense incurred for the week of April 29.* *Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.

Chart of Accounts

CHART OF ACCOUNTS
Schmidt Company
General Ledger
ASSETS 110 Cash 111 Accounts Receivable 112 Interest Receivable 113 Notes Receivable 115 Merchandise 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 Federal Income Tax Payable 219 Employees State Income Tax Payable 221 Retirement Savings Deductions Payable 224 Federal Unemployment Tax Payable 225 State Unemployment Tax Payable 226 Vacation Pay Payable 227 Unfunded Pension Liability 228 Product Warranty Payable EQUITY 310 Owner, Capital 311 Owner, Drawing	REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Merchandise Sold 520 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 539 Product Warranty Expense 540 Miscellaneous Expense 710 Interest Expense

Journal

a.	Journalize the entry to record the payroll for the week of April 29.*
b.	Journalize the entry to record the payroll tax expense incurred for the week of April 29.* *Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.

PAGE 11

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2
3
4
5
6
7
8
9
10

Answer 1

No.	Account Titles and Explanation	Debit (In $)	Credit (In $)
(a)	Salaries Expense	$ 1,440,000
	Social security tax payable		$ 86,400
	Medicare tax payable		$ 21,600
	Employees Federal income tax payable		$ 288,000
	Salaries Payable		$ 1,044,000
	(To record the payroll for the week )
No.	Account Titles and Explanation	Debit (In $)	Credit (In $)
(b)	Payroll Tax expense	$ 122,640
	Social security Tax payable		$ 86,400
	Medicare Tax payable		$ 21,600
	State Unemployment Tax Payable                  ( $ 244,000 x 5.4% )		$ 13,176
	Federal Unemployment Tax Payable                ( $ 244,000 x 0.6% )		$ 1,464
	(To record the payroll tax expense )