2. Below are the T accounts for the payroll expenses and liabilities. Enter the beginning balances and post the transactions recorded in the journal. Additional Instruction Cash - 101 Employee Federal Income Tax Payable - 211 Social Security Tax Payable - 212 Medicare Tax Payable - 213 Savings Bond Deductions Payable - 218 FUTA Tax Payable - 221 SUTA Tax Payable - 222 Wages and Salaries Expense - 511 Payroll Taxes Expense - 530 Account Number Title Balance on June 1 101 Cash $69,500.00 211 Employee Federal Income Tax Payable 2,018.00 212 Social Security Tax Payable 2,735.00 213 Medicare Tax Payable 641.00 218 Savings Bond Deductions Payable 787.50 221 FUTA Tax Payable 540.00 222 SUTA Tax Payable 1,380.00 511 Wages and Salaries Expense 0.00 530 Payroll Taxes Expense 0.00 Transactions relating to payrolls and payroll taxes which occurred during June and July are shown. June 15 Paid $5,394.00 covering the following May taxes: Social Security tax $2,735.00 Medicare tax 641.00 Employee federal income tax withheld 2,018.00 Total $5,394.00 30 June payroll: Total wages and salaries expense $22,050.00 Less amounts withheld: Social Security tax $1,367.10 Medicare tax 319.73 Employee federal income tax 1,920.00 Savings bond deductions 787.50 4,394.33 Net amount paid $17,655.67 30 Purchased savings bonds for employees, $1,575.00 30 Employer payroll taxes expenses for June were: Social Security $1,367.10 Medicare 319.73 FUTA 54.00 SUTA 364.50 Total $2,105.33 July 15 Paid $5,293.66 covering the following June taxes: Social Security tax $2,734.20 Medicare tax 639.46 Employee federal income tax withheld 1,920.00 Total $5,293.66 31 Paid SUTA tax for the quarter, $1,744.50 31 Paid FUTA tax, $594.00
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
The fiscal year of the business is June 1 to May 31
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