Principles of Financial Accounting.
Principles of Financial Accounting.
24th Edition
ISBN: 9781260158601
Author: Wild
Publisher: MCG
Question
Book Icon
Chapter 11, Problem 19E

a.

To determine

Complete the payroll register by filling in all cells for the pay period ended August 31.

a.

Expert Solution
Check Mark

Explanation of Solution

Payroll tax:

Payroll tax refers to the tax that are equally contributed by employees and 
employer based on the salary and wages of an employee. Payroll tax includes taxes 
like federal tax, local income tax, state tax, social security tax and federal and 
state unemployment tax.

Principles of Financial Accounting., Chapter 11, Problem 19E

(Table 1)

b.

To determine

Prepare journal entry to record the accrued biweekly payroll and related liabilities for deductions.

b.

Expert Solution
Check Mark

Explanation of Solution

DateAccount Titles and Explanation

Debit

(Amount in $)

Credit

(Amount in $)

August 31 Salaries expense10,020.00
     FICA - Social security taxes payable298.84
     FICA- Medicare taxes payable145.29

     Federal income taxes payable-            

     Employee           

2,380.00

     State income taxes payable-

     Employee  

388.00
     Employee benefits plan payable501.00
     Salaries payable6306.87
(To record the payroll for period)

(Table 2)

  • Salaries expense is a component of stockholder’s equity and there is an increase in the value of expense. Hence, debit the salaries expense by $10,020.00
  • FICA- Social security taxes payable is a liability and there is an increase in the value of liability. Hence, credit the FICA- social security taxes payable by $298.84.
  • FICA- Medicare taxes payable is a liability and there is an increase in the value of liability. Hence, credit the FICA- Medicare taxes payable by $145.29
  • Federal income taxes payable- employee is a liability and there is an increase in the value of liability. Hence, credit the federal income taxes payable by $2,380.00.
  • State income taxes payable- employee is a liability and there is an increase in the value of liability. Hence, credit the state income taxes payable by $388.00.
  • Employee benefits plan payable is a liability and there is an increase in the value of liability. Hence, credit the employee benefits plan payable by $501.00.
  • Salaries payable is a liability and there is an increase in the value of liability. Hence, credit the salaries payable by $6,306.87.

c.

To determine

Prepare journal entry to record the employer’s cash payment of the net payroll of requirement b.

c.

Expert Solution
Check Mark

Explanation of Solution

DateAccount Titles and Explanation

Debit

(Amount in $)

Credit

(Amount in $)

August 31 Salaries payable6,306.87
     Cash6306.87
(To record the payment of  payroll)

(Table 3)

  • Salaries payable is a liability and there is a decrease in the value of liability. Hence, debit the salaries payable by $6,306.87.
  • Cash is an asset and there is a decrease the value of an asset. Hence, credit the cash by $6,306.87.

d.

To determine

Prepare journal entry to record the employer’s payroll taxes including the contribution to the benefits plan.

d.

Expert Solution
Check Mark

Explanation of Solution

DateAccount Titles and Explanation

Debit

(Amount in $)

Credit

(Amount in $)

August 31 Payroll tax expense530.53
     FICA - Social security taxes payable298.84
     FICA- Medicare taxes payable145.29
     Federal unemployment taxes payable8.64
     State unemployment taxes payable77.76
(To record the payroll taxes)

(Table 4)

  • Payroll tax expense is a component of stockholder’s equity and there is an increase in the value of expense. Hence, debit the payroll tax expense by $530.53.
  • FICA- Social security taxes payable is a liability and there is an increase in the value of liability. Hence, credit the FICA- social security taxes payable by $298.84.
  • FICA- Medicare taxes payable is a liability and there is an increase in the value of liability. Hence, credit the FICA- Medicare taxes payable by $145.29
  • Federal unemployment taxes payable is a liability and there is an increase in the value of liability. Hence, credit the federal unemployment taxes payable by $8.64.
  • State unemployment taxes payable is a liability and there is an increase in the value of liability. Hence, credit the state unemployment taxes payable by $77.76.
DateAccount Titles and Explanation

Debit

(Amount in $)

Credit

(Amount in $)

August 31 Employee benefits expense1,002.00
     Employee benefits plan payable1,002.00
(To record the cost  of  employee benefits)

(Table 5)

  • Employee benefits expense is a component of stockholder’s equity and there is an increase in the value of expense. Hence, debit the employee benefits expense by $1,002.00.
  • Employee benefits plan payable is a liability and there is an increase in the value of liability. Hence, credit the employee benefits plan payable by $1,002.00.

e.

To determine

Prepare journal entry to record to pay all liabilities (except for the net payroll in requirement c) for this biweekly period.

e.

Expert Solution
Check Mark

Explanation of Solution

DateAccount Titles and Explanation

Debit

(Amount in $)

Credit

(Amount in $)

August 31FICA - Social security taxes payable597.68
FICA- Medicare taxes payable290.58
Federal income taxes payable- employee                     2,380.00
State income taxes payable- employee388.00
Employee benefits plan payable1,503.00
Federal unemployment taxes payable8.64
State unemployment taxes payable77.76
     Cash5,245.66
(To record payment of FICA, income taxes, SUTA, FUTA, and benefit plan contributions)

(Table 6)

  • FICA- Social security taxes payable is a liability and there is a decrease in the value of liability. Hence, debit the FICA- social security taxes payable by $597.68.
  • FICA- Medicare taxes payable is a liability and there is a decrease in the value of liability. Hence, debit the FICA- Medicare taxes payable by $290.58.
  • Federal income taxes payable- employee is a liability and there is a decrease in the value of liability. Hence, debit the federal income taxes payable by $2,380.00.
  • State income taxes payable- employee is a liability and there is a decrease in the value of liability. Hence, debit the state income taxes payable by $388.00.
  • Employee benefits plan payable is a liability and there is a decrease in the value of liability. Hence, debit the employee benefits plan payable by $1,503.00
  • Federal unemployment taxes payable is a liability and there is a decrease in the value of liability. Hence, debit the federal unemployment taxes payable by $8.64.
  • State unemployment taxes payable is a liability and there is a decrease in the value of liability. Hence, debit the state unemployment taxes payable by $77.76.
  • Cash is an asset and there is a decrease the value of an asset. Hence, credit the cash by $5,245.66.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Chapter 11 Solutions

Principles of Financial Accounting.

Knowledge Booster
Background pattern image
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
College Accounting (Book Only): A Career Approach
Accounting
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:South-Western College Pub
Text book image
College Accounting (Book Only): A Career Approach
Accounting
ISBN:9781305084087
Author:Cathy J. Scott
Publisher:Cengage Learning
Text book image
Principles of Cost Accounting
Accounting
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Cengage Learning
Text book image
College Accounting, Chapters 1-27 (New in Account...
Accounting
ISBN:9781305666160
Author:James A. Heintz, Robert W. Parry
Publisher:Cengage Learning
Text book image
PAYROLL ACCT., 2019 ED.(LL)-TEXT
Accounting
ISBN:9781337619783
Author:BIEG
Publisher:CENGAGE L
Text book image
Excel Applications for Accounting Principles
Accounting
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Cengage Learning