### Educational Website Transcription: Payroll Accounting Exercise**Exercise 4: EX.10.170**According to a summary of the payroll of Scotland Company, the following details are provided for the period:- **Salaries:** $500,000- **Federal Income Tax Withheld:** $98,000- **Unemployment Taxes:** - $15,000 was subject to state (5.4%) and federal (0.8%) unemployment taxes.**Additional Information:**- All earnings are subject to: - Social Security Tax: 6.0% - Medicare Tax: 1.5%#### Required:**a.** Journalize the entry to record the accrual of payroll. All employee earnings are subject to Medicare tax. If an amount box does not require an entry, leave it blank.- Entry Fields: Four lines with drop-down menus and corresponding input boxes for amounts.**b.** Journalize the entry to record the accrual of payroll taxes. All employee earnings are subject to Medicare tax. If an amount box does not require an entry, leave it blank.- Entry Fields: Four lines with drop-down menus and corresponding input boxes for amounts.> **Instructions:** Complete the journal entries by selecting the appropriate account titles from the dropdown and entering the exact amounts calculated based on the tax rates provided.This exercise requires an understanding of payroll tax accounting, including calculating taxes and preparing journal entries for accruals.

Social Security tax = Taxable Earnings x Social Security tax rate = $500,000*6.00% = $30,000 Medicare tax = Taxable Earnings x Social Security taxrate = $500,000*1.50% = $7,500No. Account Titles Debit Credit a. Salaries and wages expenses $500,000 Federal Income tax payable $98,000 Social security tax payable $30,000 Medicare tax payable $7,500 Salaries and wages payable $364,500 (To record the payroll) b. Payroll tax expenses $38,430 Social Security tax payable $30,000 Medicare tax payable $7,500 Federal Unemployment tax payable ($15000*0.80%) $120 State unemployment tax payable ($15000*5.40% ) $810 (To record the employer payroll taxes)

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According to a summary of the payroll of Scotland Company, salaries for the period were $500,000. Federal income tax withheld was $98,000. Also, $15,000 was subject to state (5.4%) and federal (0.8%) unemployment taxes. All earnings are subject to social security tax of 6.0% and Medicare tax of 1.5%. Required: a. Journalize the entry to record the accrual of payroll. All employee earnings are subject to Medicare tax. If an amount box does not require an entry, leave it blank. b. Journalize the entry to record the accrual of payroll taxes. All employee earnings are subject to Medicare tax. If an amount box does not require an entry, leave it blank.

According to a summary of the payroll of Scotland Company, salaries for the period were $500,000. Federal income tax withheld was $98,000. Also, $15,000 was subject to state (5.4%) and federal (0.8%) unemployment taxes. All earnings are subject to social security tax of 6.0% and Medicare tax of 1.5%. Required: a. Journalize the entry to record the accrual of payroll. All employee earnings are subject to Medicare tax. If an amount box does not require an entry, leave it blank. b. Journalize the entry to record the accrual of payroll taxes. All employee earnings are subject to Medicare tax. If an amount box does not require an entry, leave it blank.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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