2024 – The following information about the payroll for the week ended December 30 was obtained from the

The following information about the payroll for the week ended December 30 was obtained from the records of Arnsparger Equipment Co.:

 

Salaries:                                        Deductions:

Sales Salaries   $244,000               Income tax withheld     $88,704

Warehouse Salaries $135,000        Social security tax withheld  $27,216

Office Salaries   $125,000               Medicare tax withheld     $7,560 

Total:            $504,000                  U.S. savings bonds    $11,088

                                                       Group insurance      $9,072

                                                    Total Deductions           $143,640

 

 

Tax rates assumed:

                Social security, 6% on first $100,000 of employee annual earnings

                Medicare, 1.5%

                State unemployment (employer only), 4.2%

                Federal unemployment (employer only), 0.8%

 

Instructions:

1.  Assuming that the payroll for the last week of the year is to be paid on December 31, journalize the following entries:

    a.  December 30, to record the payroll.

    b.  December 30, to record the employer’s payroll taxes on the payroll to be paid on December 31. Of the total payroll for the last week of the year, $25,000 is subject to unemployment compensation taxes.

 

2.  Assuming that the payroll for the last week of the year is to be paid on January 5 of the following fiscal year, journalize the following entries:

     a.  December 30, to record the payroll.

 

     b.  January 5, to record the employer’s payroll taxes on the payroll to be paid on January 5.