Question

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

Salaries:
Sales salaries	$625,000
Warehouse salaries	240,000
Office salaries	320,000
	$1,185,000
Deductions:
Income tax withheld	$232,260
Social security tax withheld	71,100
Medicare tax withheld	17,775
U.S. savings bonds	35,500
Group insurance	53,325
	$409,960
Tax rates assumed:
Social security	6%
Medicare	1.5%
State unemployment (employer only)	5.4%
Federal unemployment (employer only)	0.8%

	Required:
1.	Assuming that the payroll for the last week of the year is to be paid on December 31, 2015, journalize the following entries (refer to the Chart of Accounts for exact wording of account titles): A. December 30, 2015, to record the payroll. Include the year when entering the date in the journal. B. December 30, 2015, 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, $30,000 is subject to unemployment compensation taxes. Include the year when entering the date in the journal.
2.	Assuming that the payroll for the last week of the year is to be paid on January 4 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, 2015, to record the payroll. Include the year when entering the date in the journal. B. On page 12 of the journal: January 4, 2016, to record the employer’s payroll taxes on the payroll to be paid on January 4. Because it is a new fiscal year, all $1,185,000 in salaries is subject to unemployment compensation taxes. Include the year when entering the date in the journal. CHART OF ACCOUNTS Saine 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 U.S. Savings Bond Deductions Payable 222 Union Dues Payable 223 Retirement Savings Deductions Payable 224 Federal Unemployment Tax Payable 225 State Unemployment Tax Payable 226 Vacation Pay Payable 227 Unfunded Pension Liability EQUITY 310 Common Stock 311 Retained Earnings 312 Dividends 313 Income Summary Scroll down to access additional pages of the journal. 1. Assuming that the payroll for the last week of the year is to be paid on December 31, 2015, journalize the following entries (refer to the Chart of Accounts for exact wording of account titles): A. December 30, 2015, to record the payroll. Include the year when entering the date in the journal. B. December 30, 2015, 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, $30,000 is subject to unemployment compensation taxes. Include the year when entering the date in the journal. PAGE 11 JOURNAL DATE DESCRIPTION POST. REF. DEBIT CREDIT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 2. Assuming that the payroll for the last week of the year is to be paid on January 4 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, 2015, to record the payroll. Include the year when entering the date in the journal. B. On page 12 of the journal: January 4, 2016, to record the employer’s payroll taxes on the payroll to be paid on January 4. Because it is a new fiscal year, all $1,185,000 in salaries is subject to unemployment compensation taxes. Include the year when entering the date in the journal. PAGE 11PAGE 12 JOURNAL DATE DESCRIPTION POST. REF. DEBIT CREDIT 1 2 3 4 5 6 7 8 9

Answer 1

Date	Account Titles	Debit	Credit
30-Dec	Sales salaries	625,000.00
	Warehouse salaries	240,000.00
	Office salaries	320,000.00
	Employees Income Tax Payable		232,260.00
	Social Security Tax Payable		71,100.00
	Medicare Tax Payable		17,775.00
	Group Insurance Payable		53,325.00
	U.S. Savings Bond Deductions Payable		35,500.00
	Salaries Payable		775,040.00
	(Being Payroll Expenses Recorded)
30-Dec	Payroll Tax Expenses	90,735.00
	Social Security Tax Payable		71,100.00
	Medicare Tax Payable		17,775.00
	State Unemployment Tax Payable		1,620.00
	Federal Unemployment Tax Payable		240.00
	(Payroll Taxes Recorded)

Date	Account Titles	Debit	Credit
30-Dec	Sales salaries	625,000.00
	Warehouse salaries	240,000.00
	Office salaries	320,000.00
	Employees Income Tax Payable		232,260.00
	Social Security Tax Payable		71,100.00
	Medicare Tax Payable		17,775.00
	Group Insurance Payable		53,325.00
	U.S. Savings Bond Deductions Payable		35,500.00
	Salaries Payable		775,040.00
	(Being Payroll Expenses Recorded)
30-Dec	Payroll Tax Expenses	162,345.00
	Social Security Tax Payable		71,100.00
	Medicare Tax Payable		17,775.00
	State Unemployment Tax Payable		63,990.00
	Federal Unemployment Tax Payable		9,480.00
	(Payroll Taxes Recorded)

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