Ask Experts Questions for FREE Help !
Ask
    aliciarenee80's Avatar
    aliciarenee80 Posts: 4, Reputation: 1
    New Member
     
    #1

    Mar 19, 2008, 09:14 PM
    Another payroll entry one
    I'm not wanting anyone to do the work for me on this, but I'm just wanting to make sure I'm on the right track here.

    I assume for the problem that I'm going to post below that for each of the different things like factory, office, and sales that I will debit an expense account and credit a payables account for each one. So that would be part 1.

    And then I assume for part 2 that I would just take only those that are subject to the taxes and figure out the entries for the tax liabilities.

    Can anyone tell me if I'm on the right track?


    The data for this problem is as follows just so you can have an understanding of what I mean...

    On August 31, 2005, payroll data from the records of Earthtec Enterprises showed:

    Payroll: Factory wages... $125,000
    Office salaries... 82,500
    Sales salaries... 98,000

    Payroll deductions: Income tax withholding... $ 47,800
    FICA tax (7.5%)... ?

    Wages and salaries not subject to FICA tax:
    Factory wages... $ 28,000
    Office salaries... 40,000
    Sales salaries... 45,000

    Wages and salaries not subject to federal and state unemployment taxes:
    Factory wages... $ 60,000
    Office salaries... 80,000
    Sales salaries... 72,000

    Provide the entries necessary to:

    (1) Record the payment of the payroll on August 31, 2005.
    (2) Record the employer's payroll tax liabilities. (The federal unemployment tax rate is 0.8 percent; the state unemployment tax rate is 5.4 percent.)
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
    Uber Member
     
    #2

    Mar 22, 2008, 11:45 PM
    Quote Originally Posted by aliciarenee80

    I assume for the problem that I'm going to post below that for each of the different things like factory, office, and sales that I will debit an expense account and credit a payables account for each one. So that would be part 1.
    For the debit, yes. You'll have 3 debits, one for each different expense account.

    But I don't know what you mean by "credit a payable account for each one." Each one what? If you mean the way you did your other one, no.

    Please see my response to your other payroll post. You're crediting payables for all the deductions, and then for the net amount left over that actually goes to the employees. I've never seen a salary payable credited for the entire gross amount. If your book is actually doing that, you need to include an example of what they are doing, including any follow-up entries.

    You are also correct that you'll have to figure out what the amount is subject to each of the employer taxes. But you also need to do that for the FICA portion that is deducted from the employees checks. The amount of the deduction and the matching portion for the employer needs to be the same.

Not your question? Ask your question View similar questions

 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

How does an eliminating entry differ from an adjusting entry [ 2 Answers ]

How does an eliminating entry differ from an adjusting entry

Payroll entry and tax entry [ 1 Answers ]

Jim Jones is owner and sole employee of sanders Company. He pays himself a salary of 1,500 each week. Additional tax information includes: FICA tax OASDI 6.2% on first 93,000 FICA tax HI 1.45% on total pay Federal income tax 232.00 per year State income tax 22% of the federal income...

Payroll and payroll taxes [ 1 Answers ]

I'm completing a project for a high school accounting class. I need to know how to journalize the payment of payroll. I also need to know how to journalize the payment of the payroll taxes.


View more questions Search