Problem 9-23A Accounting for payroll and payroll taxes [LO 5]

Milport Co. pays salaries monthly on the last day of the month. The following information is available from Milport Co. for the month ended December 31, 2013.

Administrative salaries	$	85,000
Sales salaries		66,000
Office salaries		48,000

Assume the Social Security tax rate is 6 percent on the first $110,000 of salaries and the Medicare tax rate is 1.5 percent on all salaries. James reached the $110,000 amount in October. His salary in December amounted to $11,000 and is included in the $85,000. No one else will reach the $110,000 amount for the year. None of the employee salaries are subject to unemployment tax in December.

Other amounts withheld from salaries in December were as follows:

Federal income tax	$	24,500
State income tax		7,200
Employee savings plan		3,000

Required:

a.	Prepare the journal entry to record the payment of payroll on December 31, 2013.

Date	General Journal	Debit	Credit
12/31	(Click to select)Payroll tax expenseAdministrative salaries expenseOffice salaries expenseCashAccounts payableFICA tax payable - soc. sec.Accumulated depreciationSales salaries expense
	(Click to select)CashAccounts payableSales salaries expenseFICA tax payable - soc. sec.Administrative salaries expenseAccumulated depreciationOffice salaries expensePayroll tax expense
	(Click to select)CashFICA tax payable - soc. sec.Accumulated depreciationSales salaries expenseAdministrative salaries expenseOffice salaries expenseAccounts payablePayroll tax expense
	(Click to select)Employee savings planCashAdministrative salaries expenseEmployee state income tax pay.FICA tax payable - medicareEmployee fed. income tax payableAccounts payableFICA tax payable - soc. sec.
	(Click to select)CashAccounts payableEmployee savings planFICA tax payable - medicareEmployee fed. income tax payableFICA tax payable - soc. sec.Administrative salaries expenseEmployee state income tax pay.
	(Click to select)FICA tax payable - soc. sec.Employee savings planEmployee state income tax pay.CashFICA tax payable - medicareAccounts payableAdministrative salaries expenseEmployee fed. income tax payable
	(Click to select)Employee savings planEmployee state income tax pay.Employee fed. income tax payableFICA tax payable - medicareCashFICA tax payable - soc. sec.Administrative salaries expenseAccounts payable
	(Click to select)Employee state income tax pay.FICA tax payable - soc. sec.Employee fed. income tax payableAdministrative salaries expenseEmployee savings planCashFICA tax payable - medicareAccounts payable
	(Click to select)Administrative salaries expenseCashEmployee state income tax pay.Employee savings planAccounts payableFICA tax payable - medicareFICA tax payable - soc. sec.Employee fed. income tax payable

b.	Prepare the journal entry to record the payroll tax expense for Milport Co. for December 2013.

Date	General Journal	Debit	Credit
12/31	(Click to select)FICA tax payable - medicareCashAccounts payablePayroll tax expenseSales salaries expenseCost of goods soldAccounts receivableFICA tax payable - soc. sec.
	(Click to select)FICA tax payable - medicareOffice salaries expenseFICA tax payable - soc. sec.CashAccounts payableAdministrative salaries expenseSales salaries expenseAccumulated depreciation
	(Click to select)Accumulated depreciationOffice salaries expenseAdministrative salaries expenseFICA tax payable - soc. sec.FICA tax payable - medicareCashSales salaries expenseAccounts payable

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