Question

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

Salaries:
Sales salaries	$325,000
Warehouse salaries	200,000
Office salaries	142,000
	$667,000
Deductions:
Income tax withheld	$116,600
Social security tax withheld	40,020
Medicare tax withheld	10,005
Retirement savings	14,674
Group insurance	12,006
	$193,305
Tax rates assumed:
Social security	6%
Medicare	1.5%
State unemployment (employer only)	5.4%
Federal unemployment (employer only)	0.6%

	Required:
1.	Assuming that the payroll for the last week of the year is to be paid on December 31, journalize the following entries (refer to the Chart of Accounts for exact wording of account titles): A. December 30, to record the payroll. B. 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, $32,000 is subject to unemployment compensation taxes.
2.	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 following entries (refer to the Chart of Accounts for exact wording of account titles): A. On page 11 of the journal: December 30, to record the payroll. B. On page 12 of the journal: January 5, to record the employer’s payroll taxes on the payroll to be paid on January 5. Because it is a new fiscal year, all salaries are subject to unemployment compensation taxes. CHART OF ACCOUNTS Pharrell 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 Income Tax Payable 220 Group Insurance Payable 221 Retirement Savings Payable 222 Union Dues Payable 224 Federal Unemployment Tax Payable 225 State Unemployment Tax Payable 226 Vacation Pay Payable 227 Unfunded Pension Liability EQUITY 310 Owner, Capital 311 Owner, Drawing 312 Income Summary

Answer 1

The answer is below.Thanks.

1) Preparing the Journal Entries for the Payroll for the Last Week of the Year is to be Paid on December 31:
Date	General Journal	Debit	Credit
30-Dec	Sales Salaries Expense	$325,000
	Warehouse Salaries Expense	$200,000
	Office Salaries Expense	$142,000
	Employees Income Tax Payable		$116,600
	Social Security Tax Payable		$40,020
	Medicare Tax Payable		$9,780
	Bond Deductions Payable		$14,674
	Group Insurance Payable		$12,006
	Salaries Payable		$473,920
30-Dec	Payroll Tax Expense	$51,720
	Social Security Tax Payable		$40,020
	Medicare Tax Payable		$9,780
	State Unemployment Tax Payable ($32,000 * 5.4%)		$1,728
	Federal Unemployment Tax Payable ($32,000 * 0.6%)		$192
2) Preparing the Journal Entries for the Payroll for the year is to be paid on January 5 of the following fiscal year:
Date	General Journal	Debit	Credit
30-Dec	Sales Salaries Expense	$325,000
	Warehouse Salaries Expense	$200,000
	Office Salaries Expense	$142,000
	Employees Income Tax Payable		$116,600
	Social Security Tax Payable ($667,000 * 6%)		$40,020
	Medicare Tax Payable ($667,000 * 1.5%)		$10,005
	Bond Deductions Payable		$14,674
	Group Insurance Payable		$12,006
	Salaries Payable		$473,695
5-Jan	Payroll Tax Expense	$90,045
	Social Security Tax Payable		$40,020
	Medicare Tax Payable		$10,005
	State Unemployment Tax Payable ($667,000 * 5.4%)		$36,018
	Federal Unemployment Tax Payable($667,000 * 0.6%)		$4,002