Question

on july 31, the payroll register for white sales company showed the following totals for the month: gross earnings, $39,400; social security tax, $2,442.80; medicare tax, $571.30; income tax, $3,119.32; and net amount due, $33,266.58. of the total earnings, $31,118.46 was for sales salaries and $8,281.54 was for office salaries. prepare a general journal entry to record the monthly payroll of the firm on july 31. (round your final answers to 2 decimal places.)

Answer 1

The journal entry for White Sales Company’s monthly payroll includes debits to Payroll Expenses for sales and office salaries and Payroll Taxes Expense for social security, medicare, and income tax, with credits to Cash for net amount due and Payroll Payable for total payroll liabilities.

Step-by-step explanation:

Journal Entry for Monthly Payroll

To record the monthly payroll for White Sales Company, we will make the following journal entry on July 31:

• 
  
• Debit Payroll Expenses (Sales Salaries) $31,118.46
• 
  
• Debit Payroll Expenses (Office Salaries) $8,281.54
• 
  
• Debit Payroll Taxes Expense (Social Security Tax) $2,442.80
• 
  
• Debit Payroll Taxes Expense (Medicare Tax) $571.30
• 
  
• Debit Payroll Taxes Expense (Income Tax) $3,119.32
• 
  
• Credit Cash (Net Amount Due) $33,266.58
• 
  
• Credit Payroll Payable (Total Payroll Liabilities) $6,133.42

The total debit to Payroll Expenses ($31,118.46 + $8,281.54) is the gross earnings of $39,400. Total payroll tax expenses are $2,442.80 (Social Security) + $571.30 (Medicare) + $3,119.32 (Income Tax) = $6,133.42, which is also credited to Payroll Payable, representing the sum of all payroll liabilities.