Question

Francisco Company has 20 employees, each of whom earns $2,900 per month and is paid on the last day of each month. All 20 have been employed continuously at this amount since January 1. On March 1, the following accounts and balances exist in its general ledger:

FICA—Social Security Taxes Payable, $7,192; FICA—Medicare Taxes Payable, $1,682. (The balances of these accounts represent total liabilities for both the employer's and employees' FICA taxes for the February payroll only.)

Employees' Federal Income Taxes Payable, $14,500 (liability for February only).

Federal Unemployment Taxes Payable, $696 (liability for January and February together).

State Unemployment Taxes Payable, $4,640 (liability for January and February together).

During March and April, the company had the following payroll transactions.

Mar.		15		Issued check payable to Swift Bank, a federal depository bank authorized to accept employers' payments of FICA taxes and employee income tax withholdings. The $23,374 check is in payment of the February FICA and employee income taxes.
		31		Recorded the journal entry for the March salaries payable. Then recorded the cash payment of the March payroll (the company issued checks payable to each employee in payment of the March payroll). The payroll register shows the following summary totals for the March pay period.

Salaries
Office Salaries			Shop Salaries		Gross Pay		FICA Taxes*		Federal Income Taxes		Net Pay
	$	23,200	$	34,800	$	58,000	$	3,596	$	14,500	$	39,063
							$	841

* FICA taxes are Social Security and Medicare, respectively.

		31		Recorded the employer's payroll taxes resulting from the March payroll. The company has a merit rating that reduces its state unemployment tax rate to 4.00% of the first $7,000 paid each employee. The federal rate is 0.60%.
Apr.		15		Issued check to Swift Bank in payment of the March FICA and employee income taxes.
		15		Issued check to the State Tax Commission for the January, February, and March state unemployment taxes. Filed the check and the first-quarter tax return with the Commission.
		30		Issued check payable to Swift Bank in payment of the employer's FUTA taxes for the first quarter of the year.
		30		Filed Form 941 with the IRS, reporting the FICA taxes and the employees' federal income tax withholdings for the first quarter.

Required:
Prepare journal entries to record the transactions and events for both March and April. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field.)

Journal entry worksheet

Record the cash payment of FICA (employees' and employer's) and employee income taxes of the month of February.

Note: Enter debits before credits.

Date General Journal Debit Credit Mar 15 Journal entry worksheet Record the (employee) payroll expenses and liabilities for the month of March. Note: Enter debits before credits. Date General Journal Debit Credit Mar 31 Journal entry worksheet Record the payment of payroll for March. Note: Enter debits before credits. Date General Journal Debit Credit Mar 31 Journal entry worksheet Record the employer’s payroll expenses and liabilities for the month of March. Note: Enter debits before credits. Date General Journal Debit Credit Mar 31 Journal entry worksheet Record the cash payment of FICA (employees' and employer's) and employee income taxes of the month of March. Note: Enter debits before credits. Date General Journal Debit Credit Apr 15 Journal entry worksheet Record the cash payment of SUTA taxes for the months of January, February and March. Note: Enter debits before credits. Date General Journal Debit Credit Apr 15 Journal entry worksheet Record the cash payment of FUTA taxes for the first quarter of the year. Note: Enter debits before credits. Date General Journal Debit Credit Apr 30 Journal entry worksheet Record the filing of Form 941 to the IRS, reporting the FICA taxes and the employees’ federal income tax withholdings for the first quarter. Note: Enter debits before credits. Date General Journal Debit Credit Apr 30

Answer 1

Date	Particulars	Debit	Credit
Mar-15	FICA - SST Payable	$7,192.00
	FICA - Medicare Tax Payable	$1,682.00
	Employee Federeal IT Payable	$14,500.00
	Cash		$23,374.00
	To record payment of FICA and IT
Mar-31	Office Salaries Expenses	$23,200.00
	Shop Wages Expenses	$34,800.00
	FICA - SST Payable		$3,596.00
	FICA - Medicare Tax Payable		$841.00
	Employee Federeal IT Payable		$14,500.00
	Accrued Wages Payable		$39,063.00
	To record employee payrol for period
Mar-31	Cash Payroll Bank A/c	$39,063.00
	Cash A/c		$39,063.00
	To transfer cash to payroll account
Mar-31	Accrued Wages Payable	$39,063.00
	Cash Payroll Bank A/c		$39,063.00
	To record payment of payroll
Mar-31	Payroll Tax Expenses	$5,771.00
	FICA - SST Payable		$3,596.00
	FICA - Medicare Tax Payable		$841.00
	State Federeal IT Payable		$1,160.00
	Federal Unemployment Tax Payable		$174.00
	To record employer payroll taxes
Apr-15	FICA - SST Payable	$7,192.00
	FICA - Medicare Tax Payable	$1,682.00
	Employee Federeal IT Payable	$14,500.00
	Cash		$23,374.00
	To record payment of FICA and IT
Apr-15	State Unemployment Taxes Payable	$19,140.00
	Cash		$19,140.00
	To record payment of SUTA taxes
Apr-30	Federal Unemployment Taxes Payable	$870.00
	Cash		$870.00
	To record payment of FUTA taxes
Apr-30	No entry