The following information about the payroll for the week ended December 30 was obtained from the records of Pharrell Co.: Salaries: Sales salaries $325,000 Warehouse salaries 196,000 Office salaries 131,000 $652,000 Deductions: Income tax withheld $119,000 Social security tax withheld 39,120 Medicare tax withheld 9,780 Retirement savings 14,344 Group insurance 11,736 $193,980 Tax rates assumed: Social security 6% Medicare 1.5% State unemployment (employer only) 5.4% Federal unemployment (employer only) 0.6% Required: 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 exact wording of 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, $44,000 is subject to unemployment compensation taxes. 2. Assuming that the payroll for the last week of the year is to be paid on January 5 of the following fiscal year, journalize the following entries (refer to the Chart of Accounts for exact wording of account titles): A. On page 11 of the journal: December 30, to record the payroll. B. On page 12 of the journal: January 5, to record the employer’s payroll taxes on the payroll to be paid on January 5. Because it is a new fiscal year, all salaries are subject to unemployment compensation taxes.

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


Salaries:
Sales salaries	$325,000
Warehouse salaries	196,000
Office salaries	131,000
	$652,000

Deductions:
Income tax withheld	$119,000
Social security tax withheld	39,120
Medicare tax withheld	9,780
Retirement savings	14,344
Group insurance	11,736
	$193,980

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

Required:

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 exact wording of 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, $44,000 is subject to unemployment compensation taxes.

Assuming that the payroll for the last week of the year is to be paid on January 5 of the following fiscal year, journalize the following entries (refer to the Chart of Accounts for exact wording of account titles):

A.	On page 11 of the journal: December 30, to record the payroll.
B.	On page 12 of the journal: January 5, to record the employer’s payroll taxes on the payroll to be paid on January 5. Because it is a new fiscal year, all salaries are subject to unemployment compensation taxes.

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