Answered: Wages $300 before any deductions…

Wages $300 before any deductions Income tax withholding 10% FICA 6.2% Med 1.45% FUTA 0.8% SUTA 5.4% Required 1. Provide journal entry 2. Record the payroll 3. Record employment 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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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

Wages $300 before any deductions

Income tax withholding 10%

FICA 6.2%

Med 1.45%

FUTA 0.8%

SUTA 5.4%

Required

1. Provide journal entry

2. Record the payroll

3. Record employment taxes

Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.

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