The following payroll journal entries for Oct. 15 were made by your predecessor.
ID: 2529389 • Letter: T
Question
The following payroll journal entries for Oct. 15 were made by your predecessor. For FICA tax, assume that the social security rate is 6.0% and the Medicare rate is 1.5%. The state and federal unemployment tax rates are 5.4% and 0.8%, respectively. The company offers 401k plans to employees. Review the journal entries, then answer the questions that follow.
PAGE 32
GENERAL JOURNAL
ACCOUNTING EQUATION
1
Oct. 15
Salaries Expense
647,800.00
?
2
Wages Expense
172,200.00
?
3
Social Security Tax Payable
49,200.00
?
4
Medicare Tax Payable
12,300.00
?
5
Employees Federal Income Tax Payable
147,600.00
?
6
Medical Insurance Payable
90,200.00
?
7
Retirement Contributions Payable
123,000.00
?
8
Salaries Payable
397,700.00
?
9
15
Payroll Tax Expense
62,864.00
?
10
Social Security Tax Payable
49,200.00
?
11
Medicare Tax Payable
12,300.00
?
12
Federal Unemployment Tax Payable
176.00
?
13
State Unemployment Tax Payable
1,188.00
?
In order to confirm the previous clerk’s payroll calculations, you have been asked to supply the following amounts based on your review of the payroll entries. These amounts will be checked against the company records and investigated further if necessary.
1. Determine the payroll amount subject to federal and state unemployment taxes in this payroll.
Points:
0 / 1
2. What is the total payroll for Copperfield and Company shown in these journal entries?
Points:
0 / 1
3. What is Copperfield and Company’s share of FICA taxes in this payroll?
DATE ACCOUNT TITLE POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY1
Oct. 15
Salaries Expense
647,800.00
?
2
Wages Expense
172,200.00
?
3
Social Security Tax Payable
49,200.00
?
4
Medicare Tax Payable
12,300.00
?
5
Employees Federal Income Tax Payable
147,600.00
?
6
Medical Insurance Payable
90,200.00
?
7
Retirement Contributions Payable
123,000.00
?
8
Salaries Payable
397,700.00
?
9
15
Payroll Tax Expense
62,864.00
?
10
Social Security Tax Payable
49,200.00
?
11
Medicare Tax Payable
12,300.00
?
12
Federal Unemployment Tax Payable
176.00
?
13
State Unemployment Tax Payable
1,188.00
?
Explanation / Answer
1)
payroll amount subject to federal and state unemployment taxes = [176/.008] or [1188/.054] = $ 22000
2)total payroll for Copperfield and Company =salaries and wage expense+ payroll expense
= 647800+172200+62864
=882864
3)Copperfield and Company’s share of FICA taxes in this payroll = 49200+12300=61500
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