Question

In the following summary of data for a payroll period, some amounts have been intentionally omitted:

Earnings:
1. At regular rate	?
2. At overtime rate	$60,000
3. Total earnings	?
Deductions:
4. Social security tax	31,200
5. Medicare tax	7,800
6. Income tax withheld	130,000
7. Medical insurance	18,200
8. Union dues	?
9. Total deductions	194,700
10. Net amount paid	325,300
Accounts debited:
11. Factory Wages	275,000
12. Sales Salaries	?
13. Office Salaries	115,000

	Required:
A.	Calculate the amounts omitted in lines (1), (3), (8), and (12).
B.	On December 19, journalize the entry to record the payroll accrual.*
C.	On December 20, journalize the entry to record the payment of the payroll. * Refer to the Chart of Accounts for exact wording of account titles.

Answer 1

a
	(1)	460000
	(3)	520000
	(8)	7500
	(12)	130000
b
Date	Description	Debit	Credit	Assets	Liabilities	Equity
Dec 19	Factory wages expense	275000				↓
	Sales salaries expense	130000				↓
	Office Salaries expense	115000				↓
	Social security tax payable		31200		↑
	Medicare tax payable		7800		↑
	Employees income tax payable		130000		↑
	Medical insurance payable		18200		↑
	Union dues payable		7500		↑
	Salaries payable		325300		↑
c
Dec 20	Salaries payable	325300			↓
	Cash		325300	↓
	Workings:
	Net amount paid	325300
	Add: Total deductions	194700
	Total earnings	520000
	Total earnings	520000
	Less: At overtime rate	60000
	At regular rate	460000
	Total deductions	194700
	Less:
	Social security tax	31200
	Medicare tax	7800
	Income tax withheld	130000
	Medical insurance	18200
	= Union dues	7500
	Total earnings	520000
	Less:
	Factory Wages	275000
	Office Salaries	115000
	= Sales Salaries	130000