The following information about the payroll for the week ended December 30 was obtained from the records of Pharrell Co.:Salaries: Sales salaries$350,000 Warehouse salaries182,000 Office salaries136,000 $668,000 Deductions: Federal income tax withheld$117,000 Social security tax withheld40,080 Medicare tax withheld10,020 Retirement savings14,696 Group insurance12,024 $193,820 Tax rates assumed: Social security6%Medicare1.5%State unemployment (employer only)5.4%Federal unemployment (employer only)0.6%Required:equired: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 the exact wording of the 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, $34,000 is subject to unemployment compensation taxes.2.a.On page 11 of the journal: December 30, to record the payroll. b.CHART OF ACCOUNTS Pharrell Co. General Ledger ASSETS110Cash111Accounts Receivable112Interest Receivable113Notes Receivable115Merchandise Inventory116Supplies118Prepaid Insurance120Land123Building124Accumulated Depreciation-Building125Office Equipment126Accumulated Depreciation-Office Equipment LIABILITIES210Accounts Payable213Interest Payable214Notes Payable215Salaries Payable216Social Security Tax Payable217Medicare Tax Payable218Employees Federal Income Tax Payable220Group Insurance Payable221Bond Deductions Payable222Retirement Savings Payable224Federal Unemployment Tax Payable225State Unemployment Tax Payable226Vacation Pay Payable227Unfunded Pension Liability EQUITY310Owner, Capital311Owner, DrawingREVENUE410Sales610Interest Revenue EXPENSES510Cost of Merchandise Sold520Sales Salaries Expense521Warehouse Salaries Expense522Office Salaries Expense524Depreciation Expense-Building525Delivery Expense526Repairs Expense529Selling Expenses531Rent Expense532Depreciation Expense-Office Equipment533Insurance Expense534Supplies Expense535Payroll Tax Expense536Vacation Pay Expense537Pension Expense538Cash Short and Over540Miscellaneous Expense710Interest Expense

Payroll is remuneration that a company owes to its employees for a specific period of timeon a…

Answered: $350,000 Warehouse salaries 182,000…

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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Question

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

Salaries:
Sales salaries	$350,000
Warehouse salaries	182,000
Office salaries	136,000
	$668,000

Deductions:
Federal income tax withheld	$117,000
Social security tax withheld	40,080
Medicare tax withheld	10,020
Retirement savings	14,696
Group insurance	12,024
	$193,820

Tax rates assumed:
Social security	6%
Medicare	1.5%
State unemployment (employer only)	5.4%
Federal unemployment (employer only)	0.6%

Required:

equired:

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 the exact wording of the 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, $34,000 is subject to unemployment compensation taxes.

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

CHART OF ACCOUNTS

Pharrell Co.

General Ledger

	ASSETS
110	Cash
111	Accounts Receivable
112	Interest Receivable
113	Notes Receivable
115	Merchandise Inventory
116	Supplies
118	Prepaid Insurance
120	Land
123	Building
124	Accumulated Depreciation-Building
125	Office Equipment
126	Accumulated Depreciation-Office Equipment

	LIABILITIES
210	Accounts Payable
213	Interest Payable
214	Notes Payable
215	Salaries Payable
216	Social Security Tax Payable
217	Medicare Tax Payable
218	Employees Federal Income Tax Payable
220	Group Insurance Payable
221	Bond Deductions Payable
222	Retirement Savings Payable
224	Federal Unemployment Tax Payable
225	State Unemployment Tax Payable
226	Vacation Pay Payable
227	Unfunded Pension Liability

	EQUITY
310	Owner, Capital
311	Owner, Drawing

REVENUE
410	Sales
610	Interest Revenue

	EXPENSES
510	Cost of Merchandise Sold
520	Sales Salaries Expense
521	Warehouse Salaries Expense
522	Office Salaries Expense
524	Depreciation Expense-Building
525	Delivery Expense
526	Repairs Expense
529	Selling Expenses
531	Rent Expense
532	Depreciation Expense-Office Equipment
533	Insurance Expense
534	Supplies Expense
535	Payroll Tax Expense
536	Vacation Pay Expense
537	Pension Expense
538	Cash Short and Over
540	Miscellaneous Expense
710	Interest Expense

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$350,000 Warehouse salaries 182,000 Office salaries 136,000 $668,000 Deductions: