Payment and Distribution of Payroll

The general ledger of Smokey Mountain Mfg., Inc. showed the following credit balances on January 15:

FICA Tax Payable $3,100.00

Employee Income Tax Payable.. $1,937.50

FUTA Tax Payable.. $193.75

State Unemployment Tax Payable... $775.00

Direct labor earnings amounted to $10,500 from January 16 to 31. Indirect labor was $5,700 and sales and administrative salaries for the same period amounted to $3,800. All wages are subject to FICA, FUTA, state unemployment taxes and 10% income tax withholdings.

Required:

1. Prepare the journal entries for the following:

a. Recording the payroll

b. Paying the payroll

c. Recording the employers payroll tax liability

d. Distributing the payroll costs for January 16 to 31.

2. Prepare the journal entry to record the payment of the amounts due for the month for FICA and income tax withholdings.

3. Calculate the amount of total earnings for the period from January 1 to 15.