The payroll register of Longboat Co. indicates $5,400 of social security withhel

Question

The payroll register of Longboat Co. indicates $5,400 of social security withheld and $1,350 of Medicare tax withheld on total salaries of $90,000 for the period. Earnings of $10,000 are subject to state and federal unemployment compensation taxes at the federal rate of 0.8% and the state rate of 5.4%.

On December 31, provide the journal entry to record the payroll tax expense for the period. Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTSLongboat Co.General Ledger

On December 31, provide the journal entry to record the payroll tax expense for the period. Refer to the Chart of Accounts for exact wording of account titles.

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JOURNAL

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ASSETS 110 Cash 111 Accounts Receivable 112 Interest Receivable 113 Notes Receivable 115 Merchandise Inventory 116 Supplies 118 Prepaid Insurance 120 Land 123 Building 124 Accumulated Depreciation-Building 125 Office Equipment 126 Accumulated Depreciation-Office Equipment

Explanation / Answer

31-Dec Payroll Tax Expense 7370        Social Security Taxes Payable 5400        Medicare Taxes Payable 1350        Federal Unemployment Tax Payable 80 =10000*0.8%        State Unemployment Tax Payable 540 =10000*5.4%

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