LO1 P10-4B. Recording Payroll and Payroll Taxes The following data are taken fro

Question

LO1 P10-4B. Recording Payroll and Payroll Taxes The following data are taken from Jefferson Distribution Company's March payroll: S34,000 54,000 ,000 $95,000 S96,000 S96,000 66,000 76,000 18,600 Administrative salaries Sales salaries Custodial salaries Total payroll Salaries subject to 1.45 percent Medicare tax. Salaries subject to 8.2 percent Social Security tax Salaries subject to federal unemployment taxes Salaries subject to state unemployment taxes Federal income taxes withheld from all salaries Assume that the company is subject to a 5.2 percent state unemployment tax and an 0.6 percent federal Required Record the following in general journal form on March 3: a. Accrual of the monthly payroll. b. Payment of the net payroll. c. Accrual of the employer's payroll taxes. (Assume that the FICA tax matches the amount withheld). Payment of these payroll-related liabilities. (Assume that all are settled at the same time.) d.

Explanation / Answer

a Salaries expense 96000        Social security tax payable 5952        Medicare tax payable 1392        Federal income tax payable 18600         Salaries payable 70056 b Salaries payable 70056          Cash 70056 c Payroll tax expense 11692        Social security tax payable 5952        Medicare tax payable 1392        State unemployment taxes payable 3952 =76000*5.2%        Federal unemployment taxes payable 396 =66000*0.6% d Social security tax payable 5952 Medicare tax payable 1392 State unemployment taxes payable 3952 Federal unemployment taxes payable 396 Federal income tax payable 18600          Cash 30292

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