Question

The journal entry to record the payroll from Figure 6.1, on pages 6-2 and 6-3, would be:

	Debit	Credit
Wages Expense	24,762.70
FICA Taxes Payable—OASDI		1,535.29
FICA Taxes Payable—HI		359.06
FIT Payable		3,714.00
SIT Payable		55.25
Group Insurance Payments W/H		54.70
Cash		19,044.40

Example 6-7

The journal entry to record the payroll tax entry from Figure 6.1 on pages 6-2 and 6-3 would be (assume a SUTA tax rate of 3.0%):

	Debit	Credit
Payroll Taxes	2,785.81
FICA Taxes Payable—OASDI		1,535.29
FICA Taxes Payable—HI		359.06
FUTA Taxes Payable		148.58
SUTA Taxes Payable		742.88

The employees of Carson Bakery Company earn total wages of $7,780 during January. The total amount is taxable under FICA, FUTA, and SUTA. The state contribution rate for the company is 4.3%. The amount withheld for federal income taxes is $998.

Journalize the payment of the monthly wages, and record the payroll taxes.

If an amount box does not require an entry, leave it blank or enter "0". Round your answers to the nearest cent.

	Account	Debit	Credit
Payment of monthly wages
Payroll taxes

Answer 1

	Account	Debit	Credit
Payment of monthly wages
	Wages Expense	$7,780.00
	FICA Taxes Payable—OASDI ($7,780 x 6.2%)		$482.36
	FICA Taxes Payable—HI ($7,780 x 1.45%)		$112.81
	FIT Payable		$998.00
	SIT Payable ($7780 x 4.3%)		$334.54
	Cash		$5,852.29
Payroll taxes	Payroll Taxes	$875.25
	FICA Taxes Payable—OASDI		$482.36
	FICA Taxes Payable—HI		$112.81
	FUTA Taxes Payable ($7780 x .6%)		$46.68
	SUTA Taxes Payable ($7780 x 3%)		$233.40