Urban Window Company had gross wages of $200,000 during the week ended July 15. The amount of wages subject to social security tax was $200,000, while the amount of wages subject to federal and state unemployment taxes was $30,000. Tax rates are as follows: Social security 6.0% Medicare 1.5% State unemployment 5.4% Federal unemployment 0.6% The total amount withheld from employee wages for federal taxes was $40,500. Required: A. Journalize the entry to record the payroll for the week of July 15.* B. Journalize the entry to record the payroll tax expense incurred for the week of July 15
Urban Window Company had gross wages of $200,000 during the week ended July 15. The amount of wages subject to social security tax was $200,000, while the amount of wages subject to federal and state unemployment taxes was $30,000. Tax rates are as follows: Social security 6.0% Medicare 1.5% State unemployment 5.4% Federal unemployment 0.6% The total amount withheld from employee wages for federal taxes was $40,500. Required: A. Journalize the entry to record the payroll for the week of July 15.* B. Journalize the entry to record the payroll tax expense incurred for the week of July 15
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Urban Window Company had gross wages of $200,000 during the week ended July 15. The amount of wages subject to social security tax was $200,000, while the amount of wages subject to federal and state unemployment taxes was $30,000. Tax rates are as follows:
Social security | 6.0% |
Medicare | 1.5% |
State unemployment | 5.4% |
Federal unemployment | 0.6% |
The total amount withheld from employee wages for federal taxes was $40,500.
Required: | |||
A. | |||
B. | Journalize the entry to record the payroll tax expense incurred for the week of July 15.*
|
CHART OF ACCOUNTSUrban Window CompanyGeneral Ledger
ASSETS | |
110 | Cash |
111 | |
112 | Interest Receivable |
113 | Notes Receivable |
115 | Merchandise Inventory |
116 | Supplies |
118 | Prepaid Insurance |
120 | Land |
123 | Building |
124 | |
125 | Office Equipment |
126 | Accumulated Depreciation-Office Equipment |
LIABILITIES | |
210 | Accounts Payable |
213 | Interest Payable |
214 | Notes Payable |
215 | Wages Payable |
216 | Social Security Tax Payable |
217 | Medicare Tax Payable |
218 | Employees Federal Income Tax Payable |
219 | Employees State Income Tax Payable |
221 | Retirement Savings Deductions Payable |
224 | Federal Unemployment Tax Payable |
225 | State Unemployment Tax Payable |
226 | Vacation Pay Payable |
227 | Unfunded Pension Liability |
228 | Product Warranty Payable |
EQUITY | |
310 | Owner, Capital |
311 | Owner, Drawing |
312 | Income Summary |
REVENUE | |
410 | Sales |
610 | Interest Revenue |
EXPENSES | |
510 | Cost of Merchandise Sold |
520 | Wages Expense |
524 | Depreciation Expense-Building |
525 | Delivery Expense |
526 | Repairs Expense |
529 | Selling Expenses |
531 | Rent Expense |
532 | Depreciation Expense-Office Equipment |
533 | Insurance Expense |
534 | Supplies Expense |
535 | Payroll Tax Expense |
536 | Vacation Pay Expense |
537 | Pension Expense |
538 | Cash Short and Over |
539 | Product Warranty Expense |
540 | Miscellaneous Expense |
710 | Interest Expense |
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