In the following summary of data for a payroll period, some amounts have been intentionally omitted: Earnings: 1. At regular rate 2. At overtime rate 3. Total earnings Deductions: 4. Social security tax 5. Medicare tax 6. Income tax withheld 7. Medical insurance 8. Union dues 9. Total deductions 10. Net amount paid Accounts debited: 11. Factory Wages 12. Sales Salaries 13. Office Salaries $80,000 ? (32,400) (8,100) (135,000) (18,900) 7 (201,150) $338,850 285,000 ? 120,000 a. Calculate the amounts omitted in lines (1), (3), (8), and (12). Assume that the social security tax rate was 6.0% and the Medicare tax rate was 1.5%.

In the following summary of data for a payroll period, some amounts have been intentionally omitted: Earnings: 1. At regular rate 2. At overtime rate 3. Total earnings Deductions: 4. Social security tax 5. Medicare tax 6. Income tax withheld 7. Medical insurance 8. Union dues 9. Total deductions 10. Net amount paid Accounts debited: 11. Factory Wages 12. Sales Salaries 13. Office Salaries $80,000 ? (32,400) (8,100) (135,000) (18,900) 7 (201,150) $338,850 285,000 ? 120,000 a. Calculate the amounts omitted in lines (1), (3), (8), and (12). Assume that the social security tax rate was 6.0% and the Medicare tax rate was 1.5%.

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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Concept explainers

Payroll Entries

Payroll is a comprehensive record of employees that are paid by the company. Payroll classifies employees into various categories according to their function and pays scale (basic wage, allowance, income tax, other taxes, employee loans, etc.). Payroll processes form the bedrock of every organization as it contains sensitive information on the ‘wage and paycheck’ portion of the company’s strength—its employees. The organization needs to keep a track of the employees currently on the payroll, the net payout for the company, the record of transactions related to the employees including deductions and payroll taxes to identify the liability and its effect on the balance sheet (and other financial statements). Payroll records also include qualitative factors such as the conduct of the employee.

Question

Summary Payroll Data
In the following summary of data for a payroll period, some amounts have been intentionally omitted:
Earnings:
1. At regular rate
2. At overtime rate
3. Total earnings
Deductions:
4. Social security tax
5. Medicare tax
6. Income tax withheld
7. Medical insurance
8. Union dues
9. Total deductions
10. Net amount paid
Accounts debited:
11. Factory Wages
12. Sales Salaries
13. Office Salaries
$80,000
?
(32,400)
(8,100)
(135,000)
(18,900)
(201,150)
$338,850
285,000
?
120,000
a. Calculate the amounts omitted in lines (1), (3), (8), and (12). Assume that the social security tax rate was 6.0% and the Medicare tax rate was 1.5%.
(1)
(3)

a. Calculate the amounts omitted in lines (1), (3), (8), and (12). Assume that the social security tax rate was 6.0% and the Medicare tax rate was 1.5%.
(1)
(3)
8
(8)
(12)
b. Journalize the entry to record the payroll accrual. If an amount box does not require an entry, leave it blank.
Factory Wages Expense
285,000 ✓
0 ✓
Sales Salaries Expense
Office Salaries Expense
Social Security Tax Payable
Medicare Tax Payable
Employees Income Tax Payable
Medical Insurance Payable
Union Dues Payable
Salaries Payable
✓
120,000 ✓
0 ✓
0✔
0
0 ✓
0
0
32,400
8,100
135,000
18,900✔

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