Excel Product Inc. pays its employees semimonthly. The summary of the payroll fo

Question

Excel Product Inc. pays its employees semimonthly. The summary of the payroll for December 31. Indicated the following: For the year ended December 31, $40,000 of the December 31 payroll is subject to social security tax of 6% $120,000 is subject to Medicare tax of 1.5% ; $10,000 is subject to state unemployment tax of 4.3% and federal unemployment tax of 0.8%. As of January 1, of the following year, all of the $120,000 is subject to all payroll taxes. Prepares the journal entries for payroll tax expense if the employees are paid (a) December 31 of the current year.

Explanation / Answer

31 december

1 january

account debit credit payroll tax expense 4710 social secutiry tax 40000*6% 2400 Medicare tax 120000*1.5% 1800 state Unemployment tax 10000*4.3% 430 federal Unemployment tax 10000*0.8% 80 to emplyers

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