Question

In: Accounting

The following payroll liability accounts are included in the ledger of Harmon Company on January 1, 2017.

The following payroll liability accounts are included in the ledger of Harmon Company on January 1, 2017.

FICA Taxes Payable...................................................................................$ 760.00

Federal Income Taxes Payable.............................................................1,204.60

State Income Taxes Payable.....................................................................108.95

Federal Unemployment Taxes Payable................................................288.95

State Unemployment Taxes Payable.................................................1,954.40

Union Dues Payable....................................................................................870.00

U.S. Savings Bonds Payable.....................................................................360.00

In January, the following transactions occurred.

Jan. 10 Sent check for $870.00 to union treasurer for union dues.

12 Remitted check for $1,964.60 to the Federal Reserve bank for FICA taxes and federal income taxes withheld.

15 Purchased U.S. Savings Bonds for employees by writing check for $360.00.

17 Paid state income taxes withheld from employees.

20 Paid federal and state unemployment taxes.

31 Completed monthly payroll register, which shows salaries and wages $58,000, FICA taxes withheld $4,437, federal income taxes payable $2,158, state income taxes payable $454, union dues payable $400, United Fund contributions payable $1,888, and net pay $48,663.

31 Prepared payroll checks for the net pay and distributed checks to employees.

At January 31, the company also makes the following accrued adjustments pertaining to employee compensation.

1. Employer payroll taxes: FICA taxes 7.65%, federal unemployment taxes 0.8%, and state unemployment taxes 5.4%.

* 2. Vacation pay: 6% of gross earnings.

 

Instructions

(a) Journalize the January transactions.

(b) Journalize the adjustments pertaining to employee compensation at January 31.

 

 

Solutions

Expert Solution

a.

Journal Entries    
Date Account Title Dr $ Cr $
Jan 10. Union Dues Payable 870.00  
  Cash   870.00
       
Jan 12. FICA Taxes Payable 760.00  
  Federal Income Tax Payable 1,204.60  
  Cash   1,964.60
       
Jan 15. US Savings Bonds Payable 360.00  
  Cash   360.00
       
Jan 17. State Income Tax Payable 108.95  
  Cash   108.95
       
       
Jan 20. Federal Unemployment Tax Payable 288.95  
  State Unemployment Tax Payable 1,954.40  
  Cash   2,243.35
b.      
Jan 31. Wages Expense 58,000.00  
  FICA Taxes Payable   4,437.00
  Federal Income Tax Payable   2,158.00
  State Income Tax Payable   454.00
  Union Dues Payable   400.00
  United Fund Contribution Payable   1,888.00
  Wages Payable   48,663.00
       
Jan 31. Wages Payable 48,663.00  
  Cash   48,663.00
       
       
       
Jan 31. Payroll Tax Expenses 8,033.00  
  Vacation Benefit Expenses 3,480.00  
  FICA Taxes Payable   4,437.00
  Federal Unemployment Tax Payable   464.00
  State Unemployment Tax Payable   3,132.00
  Vacation Pay Payable   3,480.00

a.

Journal Entries    
Date Account Title Dr $ Cr $
Jan 10. Union Dues Payable 870.00  
  Cash   870.00
       
Jan 12. FICA Taxes Payable 760.00  
  Federal Income Tax Payable 1,204.60  
  Cash   1,964.60

Junaid answered 2 years ago
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