Urban Window Company had gross wages of $350,000 during the week ended July 15. The amount of wages subject to social security tax was $350,000, while the amount of wages subject to federal and state unemployment taxes was $60,000. Tax rates are as follows:

Social security	6.0%
Medicare	1.5%
State unemployment	5.4%
Federal unemployment	0.6%

The total amount withheld from employee wages for federal taxes was $43,500.

Required:

A.

Journalize the entry to record the payroll for the week of July 15.*

B.

Journalize the entry to record the payroll tax expense incurred for the week of July 15.*

* Refer to the Chart of Accounts for exact wording of account titles.

CHART OF ACCOUNTS

Urban Window Company

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	Wages Payable
216	Social Security Tax Payable
217	Medicare Tax Payable
218	Employees Federal Income Tax Payable
219	Employees State Income Tax Payable
221	Retirement Savings Deductions Payable
224	Federal Unemployment Tax Payable
225	State Unemployment Tax Payable
226	Vacation Pay Payable
227	Unfunded Pension Liability
228	Product Warranty Payable

EQUITY

310

Owner, Capital

311

Owner, Drawing

312

Income Summary

A.

Journalize the entry to record the payroll for the week of July 15.*

B.

Journalize the entry to record the payroll tax expense incurred for the week of July 15.*

* Refer to the Chart of Accounts for exact wording of account titles.

PAGE 11

JOURNAL

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2
3
4
5
6
7
8
9
10

Solution

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2
3
4
5
6
7
8
9
10

	REVENUE
410	Sales
610	Interest Revenue

	EXPENSES
510	Cost of Merchandise Sold
520	Wages Expense
524	Depreciation Expense-Building
525	Delivery Expense
526	Repairs Expense
529	Selling Expenses
531	Rent Expense
532	Depreciation Expense-Office Equipment
533	Insurance Expense
534	Supplies Expense
535	Payroll Tax Expense
536	Vacation Pay Expense
537	Pension Expense
538	Cash Short and Over
539	Product Warranty Expense
540	Miscellaneous Expense
710	Interest Expense