Airline Temporary Services (ATS) pays employees monthly. Payroll information is

Question

Airline Temporary Services (ATS) pays employees monthly. Payroll information is listed below for January, the first month of ATS’s fiscal year. Assume that none of the employees exceeds the federal unemployment tax maximum salary of $7,000 in January.

Record salaries expense and payroll tax expense for the January pay period.

1) Record the employee salary, withholdings, and salaries payable.

2) Record the employer payroll tax expense.

*For number 2, the journal entry has a choice of Unemployment Tax Payable - Federal and Unemployment Tax Payable - State.

Airline Temporary Services (ATS) pays employees monthly. Payroll information is listed below for January, the first month of ATS’s fiscal year. Assume that none of the employees exceeds the federal unemployment tax maximum salary of $7,000 in January.

Explanation / Answer

Date Accounts title Dr Cr 31-Jan Salaries Expenses $600,000 State Income tax payable (120000*.25) 30000 Federal income tax Payable (120000*.75) 90000 FICA taxes payable (600000*7.65%) 45900 SalariesPayable 434100 (Being salries expnense recorded) 31-Jan Payroll tax Expense 83100 FICA tax payable 45900 State Unemployement Taxes Payable($60000*5.4%) 32400 Federal unemployement taxes Payable ($600000*.8%) 4800 (Employer payroll tax expense)

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