The following is the monthly payroll for the last three months of the year for Smiths Sporting
Question:
The following is the monthly payroll for the last three months of the year for Smith’s Sporting Goods Shop, 2 Boat Road, Lynn, Massachusetts 01945. The shop is a sole proprietorship owned and operated by Bill Smith. The employer ID number for Smith’s Sporting Goods is 28-9311893. The employees at Smith’s are paid once each month on the last day of the month. Paula Bush is the only employee who has contributed the maximum into Social Security. None of the other employees will reach the social security wage-base limit by the end of the year. Assume the rate for social security to be 6.2% with a wage-base maximum of $106,800, and the rate for Medicare to be 1.45% on all earnings. Smith’s is classified as a monthly depositor for Form 941 payroll tax deposit purposes.
Your tasks are to do the following:
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1. Journalize the entries to record the employer’s payroll tax expense for each period in the general journal.
2. Journalize the payment of each tax liability in the general journal.
3. Complete Form 941 for the fourth quarter of the currentyear.
Step by Step Answer:
Oct 31 Payroll Tax Expense 7 7 5 71 FICAOASDI Payable 6 2 8 68 FICAMedicare Payable 1 4 7 03 Record employers payroll tax Nov 30 Payroll Tax Expense 8 0 7 84 FICAOASDI Payable 6 5 4 72 FICAMedicare Pa...View the full answer
