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

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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.*
  *Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTSUrban Window CompanyGeneral Ledger

  ASSETS
110 Cash
111 Accounts Receivable
112 Interest Receivable
113 Notes Receivable
115 Merchandise Inventory
116 Supplies
118 Prepaid Insurance
120 Land
123 Building
124 Accumulated Depreciation-Building
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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