The following information about the payroll for the week ended December 30 was obtained from the records of Pharrell Co.:

Tax rates assumed:
Social security, 6%
Medicare, 1.5%
State unemployment (employer only), 5.4%
Federal unemployment (employer only), 0.6%

Instructions

1. Assuming that the payroll for the last week of the year is to be paid on December 31, journalize the following entries:

a. December 30, to record the payroll.

b. December 30, to record the employer’s payroll taxes on the payroll to be paid on December 31. Of the total payroll for the last week of the year, $40,000 is subject to unemployment compensation taxes.

2. Assuming that the payroll for the last week of the year is to be paid on January 5 of the following fiscal year, journalize the following entries:

a. December 30, to record the payroll.

b. January 5, to record the employer’s payroll taxes on the payroll to be paid on January 5. Because it is a new fiscal year, all salaries are subject to unemployment compensation taxes.

Transcribed Image Text:

Salaries: Deductions: $402,000 Federal income tax withheld $135,975 Sales salaries Warehouse salaries Office salaries Social security tax withheld Medicare tax withheld Retirement savings Group insurance 210,000 46,620 165,000 1,655 $777,000 17,094 13,986 $225,330