Question

Entries for Payroll and Payroll Taxes

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

Salaries:				Deductions:
	Sales salaries	$303,000			Income tax withheld	$110,000
	Warehouse salaries	167,000			U.S. savings bonds	13,750
	Office salaries	155,000			Group insurance	11,250
		$625,000

Tax rates assumed:
	Social security, 6%
	Medicare, 1.5%
	State unemployment (employer only), 5.4%
	Federal unemployment (employer only), 0.8%

Required:

If an amount box does not require an entry, leave it blank.

1a. Assuming that the payroll for the last week of the year is to be paid on December 31, journalize the entry on December 30 to record the payroll.

Date	Account	Debit	Credit
Dec. 30	Sales Salaries Expense
	Warehouse Salaries Expense
	Office Salaries Expense
	Employees Income Tax Payable
	Social Security Tax Payable
	Medicare Tax Payable
	Bond Deductions Payable
	Group Insurance Payable
	Salaries Payable

1b. Assuming that the payroll for the last week of the year is to be paid on December 31, journalize the entry on 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, $31,000 is subject to unemployment compensation taxes.

Date	Account	Debit	Credit
Dec. 30	Payroll Tax Expense
	Social Security Tax Payable
	Medicare Tax Payable
	State Unemployment Tax Payable
	Federal Unemployment Tax Payable

2a. 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 entry on December 30 to record the payroll.

Date	Account	Debit	Credit
Dec. 30	Sales Salaries Expense
	Warehouse Salaries Expense
	Office Salaries Expense
	Employees Income Tax Payable
	Social Security Tax Payable
	Medicare Tax Payable
	Bond Deductions Payable
	Group Insurance Payable
	Salaries Payable

2b. 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 entry to record the employer's payroll taxes on the payroll to be paid on January 5. Because it is a new fiscal year, all $625,000 in salaries is subject to unemployment compensation taxes.

Date	Account	Debit	Credit
Jan. 5	Payroll Tax Expense
	Social Security Tax Payable
	Medicare Tax Payable
	State Unemployment Tax Payable
	Federal Unemployment Tax Payable

Answer 1

S. No.	Date	Account Tittle	Amount	Amount
1(a)	30-Dec	Sales Salaries Expense	$303,000
		Warehouse Salaries Expense	$167,000
		Office Salaries Expense	$155,000
		Employees Income Tax Payable		$110,000
		Social Security Tax Payable ($625000 * 6%)		$37,500
		Medicare Tax Payable ($6,25000* 1.5%)		$9,375
		Bond Deductions Payable		$13,750
		Group Insurance Payable		$11,250
		Salaries Payable		$443,125
b.	30, Dec.	Payroll Tax Expense	$48,797
		Social Security Tax Payable		$37,500
		Medicare Tax Payable		$9,375
		State Unemployment Tax Payable ($31,000*5.4%)		$1,674
		Federal Unemployment Tax Payable ($31,000 * 0.8%)		$248
2(a).	30-Dec	Sales Salaries Expense	$303,000
		Warehouse Salaries Expense	$167,000
		Office Salaries Expense	$155,000
		Employees Income Tax Payable		$110,000
		Social Security Tax Payable ($625000 * 6%)		$37,500
		Medicare Tax Payable ($6,25000* 1.5%)		$9,375
		Bond Deductions Payable		$13,750
		Group Insurance Payable		$11,250
		Salaries Payable		$443,125
2(b).	30-Dec	Payroll Tax Expense	$85,625
		Social Security Tax Payable		$37,500
		Medicare Tax Payable		$9,375
		State Unemployment Tax Payable ($625000*5.4%)		$33,750
		Federal Unemployment Tax Payable ($625,000 * 0.8%)		$5,000