Answer:
Answer is explained in the explanation section below.
Explanation:
Let's first sort out the data given:
Salaries:
Sales Salaries = $540,000
Warehouse salaries = 155,000
Office salaries = 85,000
Total Salaries = $780,000
Deductions:
Income tax withheld = $160,000
U.S. savings bonds = 10,500
Group insurance = 9,000
Total Deductions = 179,500
Tax Rates Assumed:
Social Security = 6%
Medicare = 1.5%
State unemployment (employer only) = 5.4%
Federal unemployment (employer only) = 0.8%
The above data is now fully sorted out. Now, we can easily solve the required questions.
1. a)
Dated = Dec. 30:
Debit Amounts:
Sales Salaries Expense = $ 540,000
Warehouse Salaries Expense =
$ 155,000
Office Salaries Expense = $ 85,000
Total Debit Amounts = $ 540,000 + $ 155,000 + $ 85,000 = $780,000
Total Debit Amounts = $780,000
Credit Amounts:
Employees Income Tax Payable = $ 160,000
Social Security Tax Payable ($780,000 * 6%) = $ 46,800
Medicare Tax Payable ($780,000 * 1.5%) = $ 11,700
Bond Deductions Payable = $ 10,500
Group Insurance Payable =
$ 9,000
Salaries Payable = $ 542,000
Total Credit Amounts = $ 160,000 + $ 46,800 + $ 11,700 + $ 10,500 + $ 9,000 + $ 542,000
Total Credit Amounts = $780,000
1. b)
Dated = Dec. 30:
Debit Amounts:
Payroll Tax Expense = $ 61,476
Total Debit Amount = $ 61,476
Credit Amounts:
Social Security Tax Payable = $ 46,800
Medicare Tax Payable = $ 11,700
State Unemployment Tax Payable ($48,000*5.4%) = $ 2,592
Federal Unemployment Tax Payable ($48,000 * 0.8%) = $ 384
Total = $ 46,800 + $ 11,700 + $ 2,592+ $ 384
Total Credit Amounts = $61,476
2.a)
Dated = Dec. 30:
Debit Amounts:
Sales Salaries Expense = $ 540,000
Warehouse Salaries Expense = $ 155,000
Office Salaries Expense = $ 85,000
Total Debit Amounts = $ 540,000 + $ 155,000 + $ 85,000
Total Debit Amounts = $780,000
Credit Amounts:
Employees Income Tax Payable = $ 160,000
Social Security Tax Payable ($780,000 * 6%) = $ 46,800
Medicare Tax Payable ($780,000 * 1.5%) = $ 11,700
Bond Deductions Payable = $ 10,500
Group Insurance Payable = $ 9,000
Salaries Payable = $ 542,000
Total Credit Amounts = $ 160,000 + $ 46,800 + $ 11,700 + $ 10,500 + $ 9,000 + $ 542,000
Total Credit Amounts = $780,000
2. b)
Dated: Jan. 5:
Debit Amounts:
Payroll Tax Expense = $ 106,860
Total Debit Amounts = $ 106,860
Credit Amounts:
Social Security Tax Payable = $ 46,800
Medicare Tax Payable = $ 11,700
State Unemployment Tax Payable ($780,000*5.4%) = $ 42,120
Federal Unemployment Tax Payable ($780,000 * 0.8%) = $ 6,240
Total Credit Amounts = $ 46,800 + $ 11,700 + $ 42,120 + $ 6,240
Total Credit Amounts = $106,860
