Answer:
1. March 31
Dr Salary and Wage Expense $200,000
Cr Liability for Income Tax withheld $40,000
Cr FICA Taxes $15,000
Liability for insurance premiums withheld-employees $1,000
Cr Cash $144,000
2. Dr Payroll Tax Expense $15,000
Cr FICA payable $15,000
3. March
Dr Liability for income tax withheld $40,000
Dr Liability for insurance premium $1,000
Dr FICA taxes payable - Employees $15,000
Dr FICA taxes payable - Employers $15,000
Cr Cash $71,000
Explanation:
1. Preparation of the journal entry to record the payroll for March
March 31
Dr Salary and Wage Expense $200,000
Cr Liability for Income Tax withheld $40,000
Cr FICA Taxes $15,000
Liability for insurance premiums withheld-employees $1,000
Cr Cash ($200,000-$56,000)$144,000
(To record wages to employees)
2. Preparation of the journal entry to record the employer's payroll taxes
March 31
Dr Payroll Tax Expense $15,000
Cr FICA payable $15,000
(Employer Payroll taxes on February payroll)
3. Preparation of the journal entry to show the payment of all amounts owed to governmental agencies
March
Dr Liability for income tax withheld $40,000
Dr Liability for insurance premium $1,000
Dr FICA taxes payable - Employees $15,000
Dr FICA taxes payable - Employers $15,000
Cr Cash $71,000
($40,000+$1,000+$15,000+$15,000)
(Remittance of payroll taxes and deduction for February payroll)
