For the year ended December 31, 2020, Lily Electrical Repair Company reports the following summary payroll data. Gross earnings: Administrative salaries $199,000 Electricians’ wages 375,000 Total $574,000 Deductions: FICA taxes $38,951 Federal income taxes withheld 175,000 State income taxes withheld (3%) 17,220 United Fund contributions payable 28,700 Health insurance premiums 18,500 Total $278,371 Lily’s payroll taxes are Social Security tax 6.2%, Medicare tax 1.45%, state unemployment 2.5% (due to a stable employment record), and 0.8% federal unemployment. Gross earnings subject to Social Security taxes of 6.2% total $494,000, and gross earnings subject to unemployment taxes total $142,000. No employee exceeds the $127,200 limit related to FICA taxes. (a) Prepare a summary journal entry at December 31 for the full year’s payroll. (b) Journalize the adjusting entry at December 31 to record the employer’s payroll taxes.
For the year ended December 31, 2020, Lily Electrical Repair Company reports the following summary payroll data. Gross earnings: Administrative salaries $199,000 Electricians’ wages 375,000 Total $574,000 Deductions: FICA taxes $38,951 Federal income taxes withheld 175,000 State income taxes withheld (3%) 17,220 United Fund contributions payable 28,700 Health insurance premiums 18,500 Total $278,371 Lily’s payroll taxes are Social Security tax 6.2%, Medicare tax 1.45%, state unemployment 2.5% (due to a stable employment record), and 0.8% federal unemployment. Gross earnings subject to Social Security taxes of 6.2% total $494,000, and gross earnings subject to unemployment taxes total $142,000. No employee exceeds the $127,200 limit related to FICA taxes. (a) Prepare a summary journal entry at December 31 for the full year’s payroll. (b) Journalize the adjusting entry at December 31 to record the employer’s payroll taxes.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
For the year ended December 31, 2020, Lily Electrical Repair Company reports the following summary payroll data.
| Gross earnings: | ||
| Administrative salaries | $199,000 | |
| Electricians’ wages | 375,000 | |
| Total | $574,000 | |
| Deductions: | ||
| FICA taxes | $38,951 | |
| Federal income taxes withheld | 175,000 | |
| State income taxes withheld (3%) | 17,220 | |
| United Fund contributions payable | 28,700 | |
| Health insurance premiums | 18,500 | |
| Total | $278,371 |
Lily’s payroll taxes are Social Security tax 6.2%, Medicare tax 1.45%, state
|
(a)
|
Prepare a summary |
|
|
(b)
|
Journalize the |
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