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

Salaries:
Sales salaries	$325,000
Warehouse salaries	200,000
Office salaries	142,000
	$667,000
Deductions:
Income tax withheld	$116,600
Social security tax withheld	40,020
Medicare tax withheld	10,005
Retirement savings	14,674
Group insurance	12,006
	$193,305
Tax rates assumed:
Social security	6%
Medicare	1.5%
State unemployment (employer only)	5.4%
Federal unemployment (employer only)	0.6%

Required:

1.

Assuming that the payroll for the last week of the year is to be paid on December 31, journalize the following entries (refer to the Chart of Accounts for exact wording of account titles):

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, $32,000 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 (refer to the Chart of Accounts for exact wording of account titles):

A.

On page 11 of the journal: December 30, to record the payroll.

B.

On page 12 of the journal: January 5, to record the employers 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.

CHART OF ACCOUNTS

Pharrell Co.

General Ledger

	ASSETS
110	Cash
111	Accounts Receivable
112	Interest Receivable
113	Notes Receivable
115	Merchandise Inventory
116	Supplies
118	Prepaid Insurance
120	Land
123	Building
124	Accumulated Depreciation-Building
125	Office Equipment
126	Accumulated Depreciation-Office Equipment

	LIABILITIES
210	Accounts Payable
213	Interest Payable
214	Notes Payable
215	Salaries Payable
216	Social Security Tax Payable
217	Medicare Tax Payable
218	Employees Income Tax Payable
220	Group Insurance Payable
221	Retirement Savings Payable
222	Union Dues Payable
224	Federal Unemployment Tax Payable
225	State Unemployment Tax Payable
226	Vacation Pay Payable
227	Unfunded Pension Liability

	EQUITY
310	Owner, Capital
311	Owner, Drawing
312	Income Summary