Question

Journalize Payroll Tax The payroll register of Patel Engineering Co. indicates $2,880 of social security withheld and $720 of Medicare tax withheld on total salaries of $48,000 for the period. Earnings of $14,400 are subject to state and federal unemployment compensation taxes at the federal rate of 0.8% and the state rate of 5.4%. Provide the journal entry to record the payroll tax expense for the period. If an amount box does not require an entry, leave it blank. Round to two decimal places. Payroll Tax Expense Social Security Tax Payable 2,880 Medicare Tax Payable 720 State Unemployment Tax Payable Federal Unemployment Tax Payable

Answer 1

Answer and Explanation:

The Journal entry is shown below:-

Payroll Tax Expense Dr, $4,493

To Social Security Taxes Payable $2,880

To Medicare Taxes Payable $720

To State Unemployment Tax Payable $778 ($14,400 × 5.4%)

To Federal Unemployment Tax Payable $115 ($14,400 × 0.8%)

(Being payroll tax expense for the period is recorded)

Here we debited the payroll tax expenses as it increased the expenses and we credited the Social Security Taxes Payable, Medicare Taxes Payable, State Unemployment Tax Payable, Federal Unemployment Tax Payable as it increased the liabilities