Question

The payroll register for Gamble Company for the week ended April 29 indicated the following:

Salaries $1,560,000
Social security tax withheld 93,600
Medicare tax withheld 23,400
Federal income tax withheld 312,000

In addition, state and federal unemployment taxes were calculated at the rate of 5.4% and 0.6%, respectively, on $260,000 of salaries.

Required:
a. Journalize the entry to record the payroll for the week of April 29.
b. Journalize the entry to record the payroll tax expense incurred for the week of April 29.

Answer 1

Answer and Explanation:

The journal entries are shown below:

1. Salaries expense Dr $1,560,000

To Social security tax payable $93,600

To Medicare tax payable $23,400

To Federal income tax withheld payable $312,000

To Salaries payable $1,131,000

(Being the payroll is recorded)

For recording this we debited the salary expense as it increased the expenses and credited all payable as it also increased the liabilities

2. Payroll tax expense Dr $132,600

To Social security tax payable $93,600

To Medicare tax payable $23,400

To State unemployment tax payable ($260,000 × 5.4%) $14,040

To Federal unemployment tax payable ($260,000 × 0.6%) $1,560

(being the payroll tax expense is recorded)

For recording this we debited the payroll expense as it increased the expenses and credited all payable as it also increased the liabilities