Question

The payroll register for D. Salah Company for the week ended May 18 indicated the following:

Line Item Description Amount
Salaries $635,000
Federal income tax withheld 170,000
The salaries were all subject to the 6.0% social security tax and the 1.5% Medicare tax. In addition, state and federal unemployment taxes were computed at the rate of 5.4% and 0.8%, respectively, on $48,000 of salaries.

If an amount box does not require an entry, leave it blank.

Question Content Area

a. Journalize the entry to record the payroll for the week of May 18.

Date Account Debit Credit
May 18
CashMedicare Tax PayableSalaries ExpenseSocial Security Tax PayableState Unemployment Tax Payable

- Select - - Select -
CashEmployees Federal Income Tax ExpenseSalaries ExpenseSocial Security Tax ExpenseSocial Security Tax Payable

- Select - - Select -
CashFederal Unemployment Tax PayableMedicare Tax PayablePayroll Tax ExpenseSalaries Expense

- Select - - Select -
CashEmployees Federal Income Tax PayablePayroll Tax ExpenseState Unemployment Tax ExpenseState Unemployment Tax Payable

- Select - - Select -
CashFederal Unemployment Tax ExpenseFederal Unemployment Tax PayablePayroll Tax ExpenseSalaries Payable

- Select - - Select -
Question Content Area

b. Journalize the entry to record the payroll tax expense incurred for the week of May 18.

Date Account Debit Credit
May 18
CashMedicare Tax PayablePayroll Tax ExpenseSocial Security Tax PayableState Unemployment Tax Payable

- Select - - Select -
CashPayroll Tax ExpenseSalaries ExpenseSocial Security Tax ExpenseSocial Security Tax Payable

- Select - - Select -
CashMedicare Tax PayablePayroll Tax ExpenseSalaries ExpenseSalaries Payable

- Select - - Select -
CashPayroll Tax ExpenseSalaries PayableState Unemployment Tax ExpenseState Unemployment Tax Payable

- Select -

Answer 1

Journal entries for payroll and payroll tax expenses involve calculating taxes based on the given rates and taxable salary amounts. They are then recorded with debits to expense accounts and credits to liability accounts and cash.

Step-by-step explanation:

The question pertains to the recording of payroll and payroll tax expenses in a journal entry for D. Salah Company. First, we need to calculate the social security, Medicare, state unemployment, and federal unemployment taxes based on the given rates and taxable amounts.

Once calculated, we can journalize the payroll, recording Salaries Expense as a debit, and various tax payables and cash as credits. Then, we journalize the payroll tax expense, showing the employer's portion of social security and Medicare taxes, as well as the state and federal unemployment taxes, with Payroll Tax Expense as a debit and corresponding tax payables as credits.

To illustrate, the social security tax rate given in the question is 6.0%, while the rate for Medicare tax is 1.5%. The total salaries for the period are $635,000, but only $48,000 of the salaries are subject to state and federal unemployment taxes at rates of 5.4% and 0.8% respectively. The entries are made by calculating these amounts and then creating corresponding debits for expenses and credits for the payable accounts and cash.