The payroll register of Longboat Co. indicates $5,400 of social security withheld and $1,350 of Medicare tax withheld on total salaries

The payroll register of Longboat Co. indicates $5,400 of social security withheld and $1,350 of Medicare tax withheld on total salaries of $90,000 for the period. Retirement savings withheld from employee paychecks were $5,400 for the period. Federal withholding for the period totaled $17,820. Provide the journal entry for the period’s payroll.


Answer:









Salaries Expense 90,000
Social Security Tax Payable 5,400
Medicare Tax Payable 1,350
Employees Federal Income Tax Payable 17,820
Retirement Savings Deductions Payable 5,400
Salaries Payable 60,030




Todd Thompson’s weekly gross earnings for the week ended May 23 were $1,400, and his federal income tax withholding was $247.90. Assuming the social security rate is 6% and Medicare is 1.5% of all earnings, what is Thompson’s net pay?


Answer:







Total wage payment………………………………………… $1,400.00
Less: Federal income tax withholding………………… $247.90
Social security tax ($1,400 × 6%)……………… 84.00
Medicare tax ($1,400 × 1.5%)……………………… 21.00 352.90
Net pay…………………………………………………………… $1,047.10

Fukushima Company provides its employees with vacation benefits and a defined contribution pension plan. Employees earned vacation pay

Fukushima Company provides its employees with vacation benefits and a defined contribution pension plan. Employees earned vacation pay of $19,500 for the period. The pension plan requires a contribution to the plan administrator equal to 6% of employee salaries. Salaries were $260,000 during the period. Provide the journal entry for the (a) vacation pay and (b) pension benefit.


Answer:











a.
 Vacation Pay Expense 19,500
Vacation Pay Payable 19,500
Vacation pay accrued for the period.
b.
 Pension Expense 15,600
Cash 15,600
To record pension contribution,
6% × $260,000.




The payroll register of Longboat Co. indicates $5,400 of social security withheld and $1,350 of Medicare tax withheld on total salaries of $90,000 for the period. Earnings of $10,000 are subject to state and federal unemployment compensation taxes at the federal rate of 0.8% and the state rate of 5.4%. Provide the journal entry to record the payroll tax expense for the period.


Answer:










Payroll Tax Expense 7,370
Social Security Tax Payable 5,400
Medicare Tax Payable 1,350
State Unemployment Tax Payable* 540
Federal Unemployment Tax Payable** 80
* $10,000 × 5.4%
** $10,000 × 0.8%