Novak Company pays its office employee payroll weekly. Below is a partial list o
ID: 341686 • Letter: N
Question
Novak Company pays its office employee payroll weekly. Below is a partial list of employees and their payroll data for August. Because August is their vacation period, vacation pay is also listed.
Employee
Earnings to
July 31
Weekly
Pay
Vacation Pay to Be
Received in August
Assume that the federal income tax withheld is 10% of wages. Union dues withheld are 2% of wages. Vacations are taken the second and third weeks of August by Robbins, Kirk, and Sprouse. The state unemployment tax rate is 2.5% and the federal is 0.8%, both on a $7,000 maximum. The FICA rate is 7.65% on employee and employer on a maximum of $118,500 per employee. In addition, a 1.45% rate is charged both employer and employee for an employee’s wages in excess of $118,500.
Make the journal entries necessary for each of the four August payrolls. The entries for the payroll and for the company’s liability are made separately. Also make the entry to record the monthly payment of accrued payroll liabilities. (Round answers to 2 decimal places, e.g. 15.25. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Account Titles and Explanation
Debit
Credit
(To record Payroll 1.)
(To record Payroll taxes for Payroll 1.)
(To record payrolls 2 and 3.)
(To record payroll taxes for Payrolls 2 and 3.)
(To record payroll 4.)
(To record payroll taxes for payroll 4.)
(To record the monthly payment of accrued payroll liabilities.)
Employee
Earnings to
July 31
Weekly
Pay
Vacation Pay to Be
Received in August
Explanation / Answer
Working
Account Title Dr Cr 1st Payroll Salary & Wages 1040 Employer Fica Dr 78 Federal Tax Payable 104 Union Dues payable 20.80 State unemployment tax payable 17.44 Federal unemployment tax payable 5.58 Employee Fica Payable 78 Bank 892.18 Federal Tax Payable 104 Union Dues payable 20.8 State unemployment tax payable 17.44 Federal unemployment tax payable 5.58 Employee Fica Payable 78 Bank 225.82 2nd Payroll Salary & Wages 1040 Employer Fica Dr 78 Vacation Dr 590 Federal Tax Payable 104 Union Dues payable 20.8 State unemployment tax payable 17.44 Federal unemployment tax payable 5.58 Employee Fica Payable 78 Bank 1482.18 Federal Tax Payable 104 Union Dues payable 20.8 State unemployment tax payable 17.44 Federal unemployment tax payable 5.58 Employee Fica Payable 78 Bank 225.82 3rd Payroll Salary & Wages 1040 Employer Fica Dr 78 Vacation Dr 590 Federal Tax Payable 104 Union Dues payable 20.8 State unemployment tax payable 17.44 Federal unemployment tax payable 5.58 Employee Fica Payable 78 Bank 1482.18 Federal Tax Payable 104 Union Dues payable 20.8 State unemployment tax payable 17.44 Federal unemployment tax payable 5.58 Employee Fica Payable 78 Bank 225.82 4th Payroll Salary & Wages 1040 Employer Fica Dr 78 Federal Tax Payable 104 Union Dues payable 20.8 State unemployment tax payable 17.44 Federal unemployment tax payable 5.58 Employee Fica Payable 78 Salary & Wages Payable 1040 Employer Fica Payable 78Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.