Question

Recording Payroll and Payroll Taxes
Ruth Corporation had the following payroll for April:

Officers’ salaries	$36,000
Sales salaries	67,000
Federal income taxes withheld	19,000
FICA taxes withheld	7,500
Health insurance premiums withheld	1,800
Union dues withheld	1,400
Salaries (included above) subject to federal unemployment taxes	55,000
Salaries (included above) subject to state unemployment taxes	58,000

Required
Prepare journal entries on April 30 to record:
a. Accrual of the monthly payroll.
b. Payment of the net payroll.
c. Accrual of employer’s payroll taxes. (Assume that the FICA tax matches the amount withheld, the federal unemployment tax is 0.6 percent, and the state unemployment tax is 5.4 percent.)
d. Payment of all liabilities related to this payroll. (Assume that all are settled at the same time.)

General Journal
Date	Description	Debit	Credit
a.
Apr.30	AnswerFederal Income Tax Withholding PayableFICA Tax PayableHealth Insurance Premiums PayableUnion Dues PayableFederal Unemployment Tax PayableState Unemployment Tax PayableCashOfficers' Salaries ExpenseSales Salaries ExpensePayroll PayablePayroll Tax Expense	Answer	Answer
	Sales Salaries Expense	Answer	Answer
	AnswerFederal Income Tax Withholding PayableFICA Tax PayableHealth Insurance Premiums PayableUnion Dues PayableFederal Unemployment Tax PayableState Unemployment Tax PayableCashOfficers' Salaries ExpenseSales Salaries ExpensePayroll PayablePayroll Tax Expense	Answer	Answer
	FICA Tax Payable	Answer	Answer
	Health Insurance Premiums Payable	Answer	Answer
	Union Dues Payable	Answer	Answer
	Payroll Payable	Answer	Answer
	To record April payroll.
b.
Apr.30	AnswerFederal Income Tax Withholding PayableFICA Tax PayableHealth Insurance Premiums PayableUnion Dues PayableFederal Unemployment Tax PayableState Unemployment Tax PayableCashOfficers' Salaries ExpenseSales Salaries ExpensePayroll PayablePayroll Tax Expense	Answer	Answer
	AnswerFederal Income Tax Withholding PayableFICA Tax PayableHealth Insurance Premiums PayableUnion Dues PayableFederal Unemployment Tax PayableState Unemployment Tax PayableCashOfficers' Salaries ExpenseSales Salaries ExpensePayroll PayablePayroll Tax Expense	Answer	Answer
	To pay net payroll for April.
c.
Apr.30	AnswerFederal Income Tax Withholding PayableFICA Tax PayableHealth Insurance Premiums PayableUnion Dues PayableFederal Unemployment Tax PayableState Unemployment Tax PayableCashOfficers' Salaries ExpenseSales Salaries ExpensePayroll PayablePayroll Tax Expense	Answer	Answer
	FICA Tax Payable	Answer	Answer
	AnswerFederal Income Tax Withholding PayableFICA Tax PayableHealth Insurance Premiums PayableUnion Dues PayableFederal Unemployment Tax PayableState Unemployment Tax PayableCashOfficers' Salaries ExpenseSales Salaries ExpensePayroll PayablePayroll Tax Expense	Answer	Answer
	State Unemployment Tax Payable	Answer	Answer
	To record employer's April payroll taxes.
d.
Apr.30	Federal Income Tax Withholding Payable	Answer	Answer
	FICA Tax Payable	Answer	Answer
	AnswerFederal Income Tax Withholding PayableFICA Tax PayableHealth Insurance Premiums PayableUnion Dues PayableFederal Unemployment Tax PayableState Unemployment Tax PayableCashOfficers' Salaries ExpenseSales Salaries ExpensePayroll PayablePayroll Tax Expense	Answer	Answer
	Union Dues Payable	Answer	Answer
	Federal Unemployment Tax Payable	Answer	Answer
	State Unemployment Tax Payable	Answer	Answer
	AnswerFederal Income Tax Withholding PayableFICA Tax PayableHealth Insurance Premiums PayableUnion Dues PayableFederal Unemployment Tax PayableState Unemployment Tax PayableCashOfficers' Salaries ExpenseSales Salaries ExpensePayroll PayablePayroll Tax Expense	Answer	Answer Mark 0.00 out of 1.00
	To pay liabilities related to April payroll.

Answer 1

General Journal
No.	Date	Description	Debit	Credit
a.	Apr. 30	Officers' Salaries Expense	$36,000
		Sales Salaries Expense	$67,000
		Federal Income Tax Withholding payable		$19,000
		FICA taxes payable		$7,500
		Health insurance premium payable		$1,800
		Union dues payable		$1,400
		Payroll payable            [($36,000 + $67,000) - ($19,000 + $7,500 + $1,800 + $1,400)]		$73,300
		(To record April payroll)
b.	Apr. 30	Payroll Payable	$73,300
		Cash		$73,300
		(To pay net payroll for April)
c.	Apr. 30	Payroll taxes expense                                  [$7,500 + $330 + $3,132]	$10,962
		FICA taxes payable		$7,500
		Federal unemployment Tax payable       [$55,000 x 0.60%]		$330
		State unemployment Tax payable            [$58,000 x 5.40%]		$3,132
		(To record employer's April payroll taxes)
d.	Apr. 30	Federal Income Tax Withholding payable	$19,000
		FICA taxes payable          [$7,500 + $7,500]	$15,000
		Health insurance premium payable	$1,800
		Union dues payable	$1,400
		Federal unemployment Tax payable	$330
		State unemployment Tax payable	$3,132
		Cash   [$19,000 + $15,000 + $1,800 + $1,400 + $330 + $3,132]		$40,662
		(To pay liabilities related to April payroll)