Question

Marigold Company pays its office employee payroll weekly. Below is a partial list of employees and their payroll data for August. Because August is their vacation period, vacation pay is also listed.


Employee
Earnings to
July 31
Weekly
Pay
Vacation Pay to Be
Received in August
Mark Hamill $5,200 $240 -
Karen Robbins 4,500 190 $380
Brent Kirk 3,700 150 300
Alec Guinness 8,400 290 -
Ken Sprouse 9,000 370 740

Assume that the federal income tax withheld is 10% of wages. Union dues withheld are 2% of wages. Vacations are taken the second and third weeks of August by Robbins, Kirk, and Sprouse. The state unemployment tax rate is 2.5% and the federal is 0.8%, both on a $7,000 maximum. The FICA rate is 7.65% on employee and employer on a maximum of $128,400 per employee. In addition, a 1.45% rate is charged both employer and employee for an employee’s wages in excess of $128,400.

Make the journal entries necessary for each of the four August payrolls. The entries for the payroll and for the company’s liability are made separately. Also make the entry to record the monthly payment of accrued payroll liabilities. (Round answers to 2 decimal places, e.g. 15.25. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Answer 1

Answer-

Journal entries necessary for each of the four August payrolls are as prepared below:

Payroll 1
Date	Particulars	L.F	Amount ($)	Amount ($)
	Wages and salaries Expense (240+190+150+290+370)		1,240
	Withholding taxes payable (1,240*10%)			124
	Union Dues payable (1,240*2%)			24.8
	FICA taxes Payable (1,240*7.65%)			94.86
	Cash			996.34
	(For wages and salaries exp paid)
	Payroll tax Expense		114
	FICA taxes Payable (1,240*7.65%)			94.86
	Federal unemployment tax payable (240+190+150)*.8%			4.64
	State Unemployment tax Payable (200+150+110)*2.5%			14.5
	(For Payroll tax exp recorded)
Payroll 2 and 3
Date	Particulars	L.F	Amount ($)	Amount ($)
	Vacation wages payable (380+300+740)/2		710
	Wages and salaries Expense (240+290)		530
	Withholding taxes payable (1,240*10%)			124
	Union Dues payable (1,240*2%)			24.8
	FICA taxes Payable (1,240*7.65%)			94.86
	cash			996.34
	(For wages and salaries exp paid)
	Payroll tax Expense		114
	FICA taxes Payable (1,240*7.65%)			94.86
	Federal unemployment tax payable (240+190+150)*.8%			4.64
	State Unemployment tax Payable (200+150+110)*2.5%			14.50
	(For Payroll tax exp recorded)
Payroll 4
Date	Particulars	L.F	Amount ($)	Amount ($)
	Wages and salaries Expense (240+190+150+290+370)		1,240
	Withholding taxes payable (1,240*10%)			124
	Union Dues payable (1,240*2%)			24.8
	FICA taxes Payable (1,240*7.65%)			94.86
	cash			996.34
	(For wages and salaries exp paid)
	Payroll tax Expense		114
	FICA taxes Payable (1,240*7.65%)			94.86
	Federal unemployment tax payable (240+190+150)*.8%			4.64
	State Unemployment tax Payable (240+190+150)*2.5%			14.5
	(For Payroll tax exp recorded)
Monthly payment of accrued Payroll liabilities
	Withholding taxes payable (124*4)		496
	Union Dues payable (24.8*4)		99.2
	FICA taxes Payable (94.86*8)		758.88
	Federal unemployment tax payable (4.64*4)		18.56
	State Unemployment tax Payable (14.5*4)		58
	Cash			1,430.64
	(For accrued payroll liabilities paid)

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