Question

1. Entries for Payroll and Payroll Taxes

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

   Salaries:				Deductions:
   	Sales salaries	$274,000			Income tax withheld	$99,440
   	Warehouse salaries	151,000			U.S. savings bonds	12,430
   	Office salaries	140,000			Group insurance	10,170
   		$565,000

   Tax rates assumed:
   	Social security, 6%
   	Medicare, 1.5%
   	State unemployment (employer only), 5.4%
   	Federal unemployment (employer only), 0.8%

   Required:

   If an amount box does not require an entry, leave it blank.

   1a. Assuming that the payroll for the last week of the year is to be paid on December 31, journalize the entry on December 30 to record the payroll.

   Date	Account	Debit	Credit
   Dec. 30	Sales Salaries Expense	fill in the blank 2	fill in the blank 3
   	Warehouse Salaries Expense	fill in the blank 5	fill in the blank 6
   	Office Salaries Expense	fill in the blank 8	fill in the blank 9
   	Employees Income Tax Payable	fill in the blank 11	fill in the blank 12
   	Social Security Tax Payable	fill in the blank 14	fill in the blank 15
   	Medicare Tax Payable	fill in the blank 17	fill in the blank 18
   	Bond Deductions Payable	fill in the blank 20	fill in the blank 21
   	Group Insurance Payable	fill in the blank 23	fill in the blank 24
   	Salaries Payable	fill in the blank 26	fill in the blank 27

   1b. Assuming that the payroll for the last week of the year is to be paid on December 31, journalize the entry on 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, $28,000 is subject to unemployment compensation taxes.

   Date	Account	Debit	Credit
   Dec. 30	Payroll Tax Expense	fill in the blank 29	fill in the blank 30
   	Social Security Tax Payable	fill in the blank 32	fill in the blank 33
   	Medicare Tax Payable	fill in the blank 35	fill in the blank 36
   	State Unemployment Tax Payable	fill in the blank 38	fill in the blank 39
   	Federal Unemployment Tax Payable	fill in the blank 41	fill in the blank 42

   2a. 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 entry on December 30 to record the payroll.

   Date	Account	Debit	Credit
   Dec. 30	Sales Salaries Expense	fill in the blank 44	fill in the blank 45
   	Warehouse Salaries Expense	fill in the blank 47	fill in the blank 48
   	Office Salaries Expense	fill in the blank 50	fill in the blank 51
   	Employees Income Tax Payable	fill in the blank 53	fill in the blank 54
   	Social Security Tax Payable	fill in the blank 56	fill in the blank 57
   	Medicare Tax Payable	fill in the blank 59	fill in the blank 60
   	Bond Deductions Payable	fill in the blank 62	fill in the blank 63
   	Group Insurance Payable	fill in the blank 65	fill in the blank 66
   	Salaries Payable	fill in the blank 68	fill in the blank 69

   2b. 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 entry to record the employer's payroll taxes on the payroll to be paid on January 5. Because it is a new fiscal year, all $565,000 in salaries is subject to unemployment compensation taxes.

   Date	Account	Debit	Credit
   Jan. 5	Payroll Tax Expense	fill in the blank 71	fill in the blank 72
   	Social Security Tax Payable	fill in the blank 74	fill in the blank 75
   	Medicare Tax Payable	fill in the blank 77	fill in the blank 78
   	State Unemployment Tax Payable	fill in the blank 80	fill in the blank 81
   	Federal Unemployment Tax Payable	fill in the blank 83	fill in the blank 84

   Feedback

   Gross pay represents total earnings before taxes and other deductions. Net pay, also known as take home pay, represents how much the employees receive of gross earnings, after taxes and deductions. Employers are required to pay taxes on employee earnings.

   Learning Objective 2

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Answer 1