Question

Townson Company had gross wages of $200,000 during the week ended December 10. The amount of wages subject to social security tax was $180,000, while the amount of wages subject to federal and state unemployment taxes was $24,000. Tax rates are as follows: Social security 6.0% Medicare 1.5 State unemployment 5.3 Federal unemployment 0.8 The total amount withheld from employee wages for federal income taxes was $32,000. Required: 1. Journalize the entry to record the payroll for the week of December 10. If an amount box does not require an entry, leave it blank. fill in the blank 772b2b050feafc9_2 fill in the blank 772b2b050feafc9_3 fill in the blank 772b2b050feafc9_5 fill in the blank 772b2b050feafc9_6 fill in the blank 772b2b050feafc9_8 fill in the blank 772b2b050feafc9_9 fill in the blank 772b2b050feafc9_11 fill in the blank 772b2b050feafc9_12

Answer 1

Answer:

1. Dr Wages Expense200,000

Cr Social Security Tax Payable 10,800

Cr Medicare Tax Payable 3,000

Cr Employees Federal Income Tax Payable 32,000

Cr Wages Payable 154,200

2. Dr Payroll Tax Expense15,264

Cr Social Security Tax Payable10,800

Cr Medicare Tax Payable3,000

Cr State Unemployment Tax Payable 1,272

Cr Federal Unemployment Tax Payable 192

Explanation:

1. Preparation of Journal entry to record the payroll for the week of December 10.

Dr Wages Expense200,000

Cr Social Security Tax Payable 10,800

($180,000 x 6%)

Cr Medicare Tax Payable 3,000

($200,000 x 1.5%)

Cr Employees Federal Income Tax Payable 32,000

Cr Wages Payable 154,200

[200,000-(10,800+3,000+32,000)]

2) Preparation of the Journal entry to record the payroll tax expense incurred for the week of December 10.

Dr Payroll Tax Expense15,264

(10,800+3,000+1,272+192)

Cr Social Security Tax Payable10,800

Cr Medicare Tax Payable3,000

Cr State Unemployment Tax Payable 1,272

($24,000 x 5.3%)

Cr Federal Unemployment Tax Payable 192($24,000 x 0.8%)