Part 2 Instructions: Calculate and answer each question below. Be sure to show all work.1. ALR Inc pays a weekly payroll of $255,000 that includes federal taxes withheld of $38,100, FICA taxes withheld of$23,670, and 401(k) withholdings of $27,000. What is the effect on assets and liabilities from this transaction?Answer:2. ALR provides its employees two weeks of paid vacation per year. As of December 31, 65 employees have earnedtwo weeks of vacation time to be taken the following year. If the average weekly salary for these employees is $900,what is the required journal entry?Answer:3. The total payroll of ALR Inc for the month of October, 2020 was $960,000, of which $180,000 represented amountspaid in excess of $128,400 to certain employees. $600,000 represented amounts paid to employees in excess of the$7,000 maximum subject to unemployment taxes. $180,000 of federal income taxes and $18,000 of union dues werewithheld. The state unemployment tax is 1%, the federal unemployment tax is .8%, and the current F.I.C.A. tax is7.65% on an employee's wages to $128,400 and 1.45% in excess of $128,400. What amount should Arlo record aspayroll tax expense?Answer:

Weekly Payroll: Employees with variable work schedules and those who work overtime will benefit from…

1. ALR Inc pays a weekly payroll of $255,000 that includes federal taxes withheld of $38,100, FICA taxes withheld of $23,670, and 401(k) withholdings of $27,000. What is the effect on assets and liabilities from this transaction?

1. ALR Inc pays a weekly payroll of $255,000 that includes federal taxes withheld of $38,100, FICA taxes withheld of $23,670, and 401(k) withholdings of $27,000. What is the effect on assets and liabilities from this transaction?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Payroll Entries

Payroll is a comprehensive record of employees that are paid by the company. Payroll classifies employees into various categories according to their function and pays scale (basic wage, allowance, income tax, other taxes, employee loans, etc.). Payroll processes form the bedrock of every organization as it contains sensitive information on the ‘wage and paycheck’ portion of the company’s strength—its employees. The organization needs to keep a track of the employees currently on the payroll, the net payout for the company, the record of transactions related to the employees including deductions and payroll taxes to identify the liability and its effect on the balance sheet (and other financial statements). Payroll records also include qualitative factors such as the conduct of the employee.

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