During the month of March, Olinger Company’s employees earned wages of $72,100.

Question

During the month of March, Olinger Company’s employees earned wages of $72,100. Withholdings related to these wages were $5,516 for Social Security (FICA), $8,449 for federal income tax, $3,492 for state income tax, and $451 for union dues. The company incurred no cost related to these earnings for federal unemployment tax but incurred $789 for state unemployment tax. Prepare the necessary March 31 journal entry to record salaries and wages expense and salaries and wages payable. Assume that wages earned during March will be paid during April.

Explanation / Answer

Journal Debit Credit Salaries and wages expense    72,100 FICA tax payable      8,449 Social security tax payable      5,516 State income tax payable      3,492 Union dues          451 Salaries and wages payable    54,192

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