Answered: For the year ended December 31, 2022.…

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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For the year ended December 31, 2022. Concord Electrical Repair Company reports the following summary payroll data.

Gross earnings:

Administrative salaries	$188,000
Electrician's wages	342,000
Total	530,000

Deductions:

FICA taxes	$35,027
Federal income taxes withheld	160,000
State income taxes withheld (3%)	15,900
United Fund contributions payable	25,570
Health insurance premiums	19,500
Total	$255,997

Concord's payroll taxes are Social Security tax 6.2%, Medicare tax 1.45%, state unemployment 2.5% (due to a stable employment record), and 0.6% federal unemployment. Gross earnings subject to Social Security taxes of 6.2% total $441,000, and gross earnings subject to unemployment taxes total $136,000. No employee exceeds the $132,900 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, 2022, Concord Electrical Repair Company reports the following summary payroll data.
Gross earnings:
Administrative salaries
Electricians' wages
Deductions:
FICA taxes
Federal income taxes withheld
State income taxes withheld (3%)
United Fund contributions payable
Health insurance premiums
(b)
Total
Total
(a)
(b)
Concord's payroll taxes are Social Security tax 6.2%, Medicare tax 1.45%, state unemployment 2.5% (due to a stable employment
record), and 0.6% federal unemployment. Gross earnings subject to Social Security taxes of 6.2% total $441,000, and gross earnings
subject to unemployment taxes total $136,000. No employee exceeds the $132,900 limit related to FICA taxes.
No. Account Titles and Explanation
Salarles and Wages Expense
FICA Taxes Payable
Federal Income Taxes Payable
$188,000
(Round answers to O decimal places, e.g. 125. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
State Income Taxes Payable
Prepare a summary journal entry at December 31 for the full year's payroll.
Journalize the adjusting entry at December 31 to record the employer's payroll taxes.
$530,000
Health Insurance Payable
342,000
Salarles and Wages Payable
United Fund Contributions Payable
Payroll Tax Expense
$35,027
$255,997
160,000
15,900
25,570
19,500
Debit
530000
Credit
35027
160000
15900
25570
19500
274003

(a)
(b)
Salaries and Wages Expense
k
FICA Taxes Payable
Federal Income Taxes Payable
State Income Taxes Payable
United Fund Contributions Payable
Health Insurance Payable
Salaries and Wages Payable
Payroll Tax Expense
FICA Taxes Payable
Federal Unemployment Taxes Payable
(c) The W-2 Wage and Tax Statement requires the following dollar data.
Complete the required data for the following employees. (Round answers to O decimal places, e.g. 5,275.)
Wages, Tips,
Other
Compensation
$54,000
26,000
Federal
Income
Tax
Withheld
State Income Tax Withheld
$26,460 $
10,140
1620
530000
780
FICA Wages
54000
26000
+A
35027
160000
15900
25570
19500
274003
35027
FICA Tax Withheld
4131

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