Question

Prepare a journal entry to record the following for September:Direct labor (factory)80,000$ Indirect labor (factory)10,000Sales commission6,000Sales & Administrative Salaries50,000Medical insurance premiums (60% Factory, 40% S&A)3,000Medical insurance is paid 100% by the employer.All employees contribute 2% of their compensation) to a 401(k) plan. The employer matches the 2% 401(k) contribution.The company considers all employer payroll taxes and all employee benefitsfor factory workers to be product costs. For this problem, assume the following tax rates:EmployeeEmployerFederal income tax15.0%FICA 7.65%7.65%SUTA3.5%Ignore any other payroll taxes; Assume all employees are under any tax thresholds.

WIP $

MOH $

Salaries expense $

Commission expense $

Employee benefits expense $

Employer payroll tax expense $

Payroll taxes payable should be credited for

Salaries payable should be credited for  

Answer 1

Account Title	Debit	Credit	Explanation
WIP	92320		Direct labor-Factory-80000+Medical Insurance premium(60%*3000),1800+FICA(80000*7.65%)+401K( 80000*2%),+SUTA(80000*3.5%),2800
MOH	11315		Indirect labor-Factory(10000+(10000*7.65%FICA tax)+(10000*2% 401K)+SUTA (10000*3.5%),350
Salaries Expense	50000		Sales & Administrative Salaries
Commission expense	6000		Sales commission
Employee benefits expense	2200		Medical Insurance premium(40%*3000),1200+401K employer matching -50000*2%,1000
Employer payroll tax expense	6244		(50000+6000)*7.65%FICA +SUTA ((50000+6000)*3.5%)
401K Employee Contribution		2800	(80000+10000+50000)*2%
Federal Income Tax withholding		21900	(80000+10000+50000+6000)*15%
Payroll taxes payable		16279	(80000+10000+50000+6000)*(7.65%+3.5%)(FICA+SUTA)
Salaries payable		127100	Plug-in figure