Question

The payroll register of Ruggerio Co. indicates $13,320 of social security withheld and $3,330 of Medicare tax withheld on total salaries of $222,000 for the period. Earnings of $33,000 are subject to state and federal unemployment compensation taxes at the federal rate of 0.60% and the state rate of 5.40%.

On December 31, provide the journal entry to record the payroll tax expense for the period. Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTS
Ruggerio Co.
General Ledger
ASSETS 110 Cash 111 Accounts Receivable 112 Interest Receivable 113 Notes Receivable 115 Merchandise Inventory 116 Supplies 118 Prepaid Insurance 120 Land 123 Building 124 Accumulated Depreciation-Building 125 Office Equipment 126 Accumulated Depreciation-Office Equipment LIABILITIES 210 Accounts Payable 213 Interest Payable 214 Notes Payable 215 Salaries Payable 216 Social Security Tax Payable 217 Medicare Tax Payable 218 Employees Federal Income Tax Payable 219 Employees State Income Tax Payable 221 Retirement Savings Deductions Payable 224 Federal Unemployment Tax Payable 225 State Unemployment Tax Payable 226 Vacation Pay Payable 227 Unfunded Pension Liability 228 Product Warranty Payable EQUITY 310 Owner, Capital 311 Owner, Drawing 312 Income Summary	REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Merchandise Sold 520 Salaries Expense 524 Depreciation Expense-Building 525 Delivery Expense 526 Repairs Expense 529 Selling Expenses 531 Rent Expense 532 Depreciation Expense-Office Equipment 533 Insurance Expense 534 Supplies Expense 535 Payroll Tax Expense 536 Vacation Pay Expense 537 Pension Expense 538 Cash Short and Over 539 Product Warranty Expense 540 Miscellaneous Expense 710 Interest Expense

On December 31, provide the journal entry to record the payroll tax expense for the period. Refer to the Chart of Accounts for exact wording of account titles.

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JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
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2
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5

Answer 1

Date	Description	Post ref.	Debit	Credit	Assets	Liabilities	Equity
December 31	Payroll Tax Expense		18630				↓
	Social Security Tax Payable			13320		↑
	Medicare Tax Payable			3330		↑
	Federal Unemployment Tax Payable			198		↑
	State Unemployment Tax Payable			1782		↑
	Note:
	Federal Unemployment Tax Payable = 33000*0.6%=198
	State Unemployment Tax Payable=33000*5.4%=1782