Recording Payroll and Payroll Taxes Manchester, Inc., had the following payroll for March: Officers' salaries $390,000 Sales salaries 650,000 Federal income taxes withheld 210,000 FICA taxes withheld 79,000 Health insurance premiums withheld 22,000 Salaries (included above) subject to federal unemployment taxes 650,000 Salaries (included above) subject to state unemployment taxes 700,000 Required Prepare journal entries on March 31 to record: a. Accrual of the monthly payroll. b. Payment of the net payroll. c. Accrual of employer's payroll taxes. (Assume that the FICA tax matches the amount withheld, the federal unemployment tax is 0.6 percent, and the state unemployment tax is 5.4 percent.) d. Payment of all liabilities related to this payroll. (Assume that all are settled at the same time.) General Journal Date Description Debit Credit a. Mar.31 Sales Salaries Expense FICA Tax Payable Health Insurance Premiums Payable Payroll Payable To record March payroll. b. Mar.31 To pay net payroll for March. c. Mar.31 FICA Tax Payable State Unemployment Tax Payable To record employer's March payroll taxes. d. Mar.31 Federal Income Tax Withholding Payable FICA Tax Payable Federal Unemployment Tax Payable State Unemployment Tax Payable To pay liabilities related to March payroll.

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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Recording Payroll and Payroll Taxes
Manchester, Inc., had the following payroll for March:

Officers' salaries	$390,000
Sales salaries	650,000
Federal income taxes withheld	210,000
FICA taxes withheld	79,000
Health insurance premiums withheld	22,000
Salaries (included above) subject to federal unemployment taxes	650,000
Salaries (included above) subject to state unemployment taxes	700,000

Required
Prepare journal entries on March 31 to record:
a. Accrual of the monthly payroll.
b. Payment of the net payroll.
c. Accrual of employer's payroll taxes. (Assume that the FICA tax matches the amount withheld, the federal unemployment tax is 0.6 percent, and the state unemployment tax is 5.4 percent.)
d. Payment of all liabilities related to this payroll. (Assume that all are settled at the same time.)

General Journal
Date	Description	Debit	Credit
a.
Mar.31
	Sales Salaries Expense

	FICA Tax Payable
	Health Insurance Premiums Payable
	Payroll Payable
	To record March payroll.
b.
Mar.31

	To pay net payroll for March.
c.
Mar.31
	FICA Tax Payable

	State Unemployment Tax Payable
	To record employer's March payroll taxes.
d.
Mar.31	Federal Income Tax Withholding Payable
	FICA Tax Payable

	Federal Unemployment Tax Payable
	State Unemployment Tax Payable

	To pay liabilities related to March payroll.

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