P10-3B. Recording Payroll and Payroll Taxes Manchester, Inc., had the following
ID: 2562941 • Letter: P
Question
P10-3B. Recording Payroll and Payroll Taxes Manchester, Inc., had the following payroll for March: $39,000 21,000 Salaries (included above) subject to federal unemployment taxes . . . . . . . . . . . . . . . Salaries (included above) subject to state unemployment taxes.... .. . . . . . . . . . . . . . . . 65,000 75,000 Required Prepare journal entries on March 31 to record a. Accrual of the monthly payroll. b. Payment of the net payroll. c. Accrual of employer's payroll taxes. (Assume that the FICA tax matches the amount withheld, the federal unemployment tax is 0.6 percent, and the state unemployment tax is 5.4 percent.) Payment of all liabilities related to this payroll. (Assume that all are settled at the same time.) d.Explanation / Answer
Particulars Debit Credit a. Salaries a/c Dr 109,000 To Fedral income taxes payable 21,000 To FICA taxes payable 7,900 To Health insurance premium payable 2,500 To Salary payable 77,600 (Being salary accrued entry passed) b. Salary payable 77,600 To Bank 77,600 (Being salary paid) c. Salaries 12,340 To FICA taxes payable 7,900 To Fedral unemployment tax payable 390 To State unemployment tax payable 4,050 ( Being employer's liabilities for various taxes has been accounted for) d. Fedral income taxes payable 21,000 FICA taxes payable 15,800 Health insurance premium payable 2,500 Fedral unemployment tax payable 390 State unemployment tax payable 4,050 To Bank 43,740 ( All the liabilities related to payroll paid)
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