Final answer:
To record the payroll, Lightning Electronics would debit Wages Expense for total wages, credit withholdings for income and FICA taxes, and credit Cash for net pay. They would also record the employer's payroll taxes including their share of FICA and unemployment taxes as additional payroll expenses.
Step-by-step explanation:
When Lightning Electronics is recording its payroll, it should make the following journal entries to account for the wages, employee withholdings, employer taxes, and net pay:
- Debit Wages Expense for the total wages ($53,000).
- Credit Employee Income Taxes Payable for the total income taxes withheld ($7,600).
- Credit FICA Taxes Payable for the total FICA taxes withheld ($2,775).
- Credit Cash for the amount of net pay deposited to employees' bank accounts ($42,625).
- Debit Payroll Tax Expense for the total employer payroll taxes (FICA and unemployment taxes).
- Credit FICA Taxes Payable for the employer's share of FICA taxes ($2,775).
- Credit Unemployment Taxes Payable for the unemployment taxes ($280).
The employer is responsible for matching the employee's FICA tax contribution and for paying additional employer taxes like the unemployment tax. The net pay represents the money you have left when your paycheck makes its way to you after all required taxes are taken out.