Problem 9-6AA Entries for payroll transactions LO P2, P3, P5 Francisco Company has 20 employees, each of whom earns $3,100 per month and is paid on the last day of each month. All 20 have been employed continuously at this amount since January 1. On March 1, the following accounts and balances exist in its general ledger: a. FICA-Social Security Taxes Payable, $7,688; FICA-Medicare Taxes Payable, $1,798. (The balances of these accounts represent total liabilities for both the employer's and employees' FICA taxes for the February payroll only.) b. Employees' Federal Income Taxes Payable, $15,500 (liability for February only). c. Federal Unemployment Taxes Payable, $744 (liability for January and February together). d. State Unemployment Taxes Payable, $4,960 (liability for January and February together). During March and April, the company had the following payroll transactions. Mar. 15 Issued check payable to Swift Bank, a federal depository bank authorized to accept employers' payments of FICA taxes and employee income tax withholdings. The $24,986 check is in payment of the February FICA and employee income taxes. Recorded the journal entry for the March salaries payable. Then recorded the cash payment of the March payroll (the company issued checks payable to each employee in payment of the March payroll). The payroll register shows the following summary totals for the March pay period. 31 Salaries Office Shop Gross Salaries Salaries Pay $24,800 $37,200 $62,000 FICA Taxes* $3,844 $ 899 Federal Income Taxes $15,500 Net Pay $41,757 * FICA taxes are Social Security and Medicare, respectively. 31 Recorded the employer's payroll taxes resulting from the March payroll. The company has a merit rating that reduces its state unemployment tax rate to 4.00% of the first $7,000 paid each employee. The federal rate is 0.60%. Apr. 15 Issued check to Swift Bank in payment of the March FICA and employee income taxes. 15 Issued check to the State Tax Commission for the January, February, and March state unemployment taxes. Filed the check and the first-quarter tax return with the Commission. 30 Issued check payable to Swift Bank in payment of the employer's FUTA taxes for the first quarter of the year. 30 Filed Form 941 with the IRS, reporting the FICA taxes and the employees' federal income tax withholdings for the first quarter. Required: Prepare journal entries to record the transactions and events for both March and April. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field.) No Credit Date Mar 15 X Answer is complete but not entirely correct. General Journal Debit FICASocial sec. taxes payable 7,688 FICA-Medicare taxes payable 1,798 Employee fed. inc. taxes payable 15,500 Cash 24,986 Mar 31 24,800 37,200 Office salaries expense Shop salaries expense FICA-Medicare taxes payable FICA-Medicare taxes payable 3,844 899 15,500 41,757 Employee fed. inc. taxes payable Salaries payable olosaks os docessos 3 Mar 31 41,757 Salaries payable Cash 41,757 41,757 4 Mar 31 6,169X Payroll taxes expense FICA-Social sec. taxes payable FICA-Medicare taxes payable 3,844 899 1,240x State unemployment taxes payable Federal unemployment taxes payable 186 5 Apr 15 F ICASocial sec. taxes payable FICA-Medicare taxes payable Employee fed. inc. taxes payable Cash 7,688 1,798 15,500
