Entries for payroll and payroll taxes

Instructions

The following information about the payroll for the week ended December 30 was obtained from the records of Boltz Co.:

Salaries: Deductions:

Sales salaries $540,000 Income tax withheld $160,000

Warehouse salaries 155,000 U.S. savings bonds 10,500

Office salaries 85,000 Group insurance 9,000

$780,000

Tax rates assumed:

Social security 6% State unemployment (employer only) 5.4%

Medicare 1.5% Federal unemployment (employer only) 0.8%

Required:

1. Assuming that the payroll for the last week of the year is to be paid on December 31, journalize the following entries (refer to
the Chart of Accounts for exact wording of account titles):

a. December 30, to record the payroll.

b. December 30, to record the employers payroll taxes on the payroll to be paid on December 31. Of the total payroll for the
last week of the year, $48,000 is subject to unemployment compensation taxes.
2. Assuming that the payroll for the last week of the year is to be paid on January 5 of the following fiscal year, journalize the

following entries (refer to the Chart of Accounts for exact wording of account titles):
On page 11 of the journal: December 30, to record the payroll.
On page 12 of the journal: January 5, to record the employer's payroll taxes on the payroll to be paid on January 5. Since it is

a new fiscal year, all $780,000 in salaries is subject to unemployment compensation taxes.

Chart of Accounts
 CHART OF ACCOUNTS

Boltz Co.
General Ledger

ASSETS REVENUE

110 Cash 410 Sales

111 Accounts Receivable 610 Interest Revenue

112 Interest Receivable

113 Notes Receivable EXPENSES

115 Inventory 510 Cost of Goods Sold

116 Supplies 520 Sales Salaries Expense

118 Prepaid Insurance 521 Warehouse Salaries Expense

120 Land 522 Office Salaries Expense

123 Building 524 Depreciation Expense-Building

124 Accumulated Depreciation-Building 525 Delivery Expense

125 Office Equipment 526 Repairs Expense

126 Accumulated Depreciation-Office Equipment 529 Selling Expenses

531 Rent Expense

LIABILITIES 532 Depreciation Expense-Office Equipment

210 Accounts Payable 533 Insurance Expense

213 Interest Payable 534 Supplies Expense

214 Notes Payable 535 Payroll Tax Expense

215 Salaries Payable 536 Vacation Pay Expense

216 Social Security Tax Payable 537 Pension Expense

217 Medicare Tax Payable 538 Cash Short and Over

218 Employees Income Tax Payable 540 Miscellaneous Expense

220 Group Insurance Payable 710 Interest Expense

221 Bond Deductions Payable

222 Union Dues Payable

223 Retirement Savings Deductions Payable

224 Federal Unemployment Tax Payable

225 State Unemployment Tax Payable

226 Vacation Pay Payable

227 Unfunded Pension Liability

EQUITY

310 Common Stock

311 Retained Earnings

312 Dividends

313 Income Summary

Journal Shaded cells h

Scroll down to access additional pages of the journal.

1. Assuming that the payroll for the last week of the year is to be paid on December 31, journalize the following entries (refer to

the Chart of Accounts for exact wording of account titles):

a. December 30, to record the payroll.

b. December 30, to record the employer's payroll taxes on the payroll to be paid on December 31. Of the total payroll for the

last week of the year, $48,000 is subject to unemployment compensation taxes.

How does grading work?

PAGE 11

JOURNAL Score: 171/171 ACCOUNTING EQUATION

DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY

1 Dec. 30 Sales Salaries Expense 540,000.00
2 Warehouse Salaries Expense 155,000.00

3 Office Salaries Expense 85,000.00

4 Employees Income Tax Payable 160,000.00

5 Social Security Tax Payable 46,800.00

6 Medicare Tax Payable 11,700.00

7 Bond Deductions Payable 10,500.00

8 Group Insurance Payable 9,000.00

9 Salaries Payable 542,000.00

10 Dec. 30 Payroll Tax Expense 61,476.00

11 Social Security Tax Payable 46,800.00

12 Medicare Tax Payable 11,700.00

13 State Unemployment Tax Payable 2,592.00

14 Federal Unemployment Tax Payable 384.00

Points:

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Gross pay represents total earnings before taxes and other deductions. Net pay, also known as take-home pay, represents how much the employees receive of gross earnings

and deductions. Employers are required to pay taxes on employee earnings.

2. Assuming that the payroll for the last week of the year is to be paid on January 5 of the following fiscal year, journalize the

following entries (refer to the Chart of Accounts for exact wording of account titles):

a. On page 11 of the journal: December 30, to record the payroll.

b. On page 12 of the journal: January 5, to record the employers payroll taxes on the payroll to be paid on January 5. Since

it is a new fiscal year, all $780,000 in salaries is subject to unemployment compensation taxes.

How does grading work?

PAGE 11

JOURNAL Score: 109/109 ACCOUNTING EQUATION

DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY

1 Dec. 30 Sales Salaries Expense 540,000.00

2 Warehouse Salaries Expense 155,000.00

3 Office Salaries Expense 85,000.00

4 Employees Income Tax Payable 160,000.00

5 Social Security Tax Payable 46,800.00

6 Medicare Tax Payable 11,700.00

7 Bond Deductions Payable 10,500.00

8 Group Insurance Payable 9,000.00

9 Salaries Payable 542,000.00

Points:

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PAGE 12

JOURNAL Score: 61/61 ACCOUNTING EQUATION

DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY

1 Jan. 5 Payroll Tax Expense 106,860.00

2 Social Security Tax Payable 46,800.00

3 Medicare Tax Payable 11,700.00
4 State Unemployment Tax Payable 42,120.00

5 Federal Unemployment Tax Payable 6,240.00

Points:

Feedback

Check My Work

Gross pay represents total earnings before taxes and other deductions. Net pay, also known as take-home pay, represents how much the employees receive of gross earnings

and deductions. Employers are required to pay taxes on employee earnings.