Question

Exercise 9-17 Preparing payroll register and related entries LO P5

Stark Company has five employees. Employees paid by the hour receive a $11 per hour pay rate for the regular 40-hour workweek plus one and one-half times the hourly rate for each overtime hour beyond the 40 hours per week. Hourly employees are paid every two weeks, but salaried employees are paid monthly on the last biweekly payday of each month. FICA Social Security taxes are 6.2% of the first $118,500 paid to each employee, and FICA Medicare taxes are 1.45% of gross pay. FUTA taxes are 0.6% and SUTA taxes are 5.4% of the first $7,000 paid to each employee. The company has a benefits plan that includes medical insurance, life insurance, and retirement funding for employees. Under this plan, employees must contribute 5 percent of their gross income as a payroll withholding, which the company matches with double the amount. Following is the partially completed payroll register for the biweekly period ending August 31, which is the last payday of August.

a. Complete this payroll register by filling in all cells for the pay period ended August 31. (Round your answers to 2 decimal places.)

Employee	Cumulative Pay (Excludes Current Period)	Current Period Gross Pay			FIT Withholding	FUTA	FICA S.S. Employee	FICA Medicare Employee	Employee Plan Withholding	Employee Net Pay
		Pay Type	Pay Hours	Gross Pay	SIT Withholding	SUTA	FICA S.S. Employer	FICA Medicare Employer	Employer Plan Expense
Kathleen	$115,550.00	Salary		$7,000.00	$2,950.00
					680.00
Anthony	5,850.00	Salary		690.00	118.00				34.50
					39.00				69.00
Nichole	16,900.00	Regular	80		148.00
		Overtime	11		44.00
Zoey	6,800.00	Regular	80		138.00
		Overtime	6		41.00
Gracie	5,400.00	Regular	75	825.00	128.00
		Overtime			40.00
Totals	$150,500.00				$3,482.00	$0.00	$0.00	$0.00	$34.50	$0.00
					844.00	0.00	0.00	0.00	69.00

b, c, d & e. Prepare the August 31 journal entry to: (Round your answers to 2 decimal places.)
b. Record the accrued biweekly payroll and related liabilities for deductions.
c. Record the employer’s cash payment of the net payroll of part b.
d. Record the employer’s payroll taxes including the contribution to the benefits plan.
e. Pay all liabilities (except for the net payroll in part c) for this biweekly period.

Problem 9-6AA Entries for payroll transactions LO P2, P3, P5

Francisco Company has 10 employees, each of whom earns $3,100 per month and is paid on the last day of each month. All 10 have been employed continuously at this amount since January 1. On March 1, the following accounts and balances exist in its general ledger:

1. FICA—Social Security Taxes Payable, $3,844; FICA—Medicare Taxes Payable, $900. (The balances of these accounts represent total liabilities for both the employer's and employees' FICA taxes for the February payroll only.)
2. Employees' Federal Income Taxes Payable, $7,750 (liability for February only).
3. Federal Unemployment Taxes Payable, $372 (liability for January and February together).
4. State Unemployment Taxes Payable, $2,480 (liability for January and February together).

During March and April, the company had the following payroll transactions.

Mar.		15		Issued check payable to Swift Bank, a federal depository bank authorized to accept employers' payments of FICA taxes and employee income tax withholdings. The $12,494 check is in payment of the February FICA and employee income taxes.
		31		Recorded the journal entry for the March salaries payable. Then recorded the cash payment of the March payroll (the company issued checks payable to each employee in payment of the March payroll). The payroll register shows the following summary totals for the March pay period.

Salaries
Office Salaries			Shop Salaries		Gross Pay		FICA Taxes*		Federal Income Taxes		Net Pay
	$	12,400	$	18,600	$	31,000	$	1,922	$	7,750	$	20,878
							$	450

* FICA taxes are Social Security and Medicare, respectively.

		31		Recorded the employer's payroll taxes resulting from the March payroll. The company has a merit rating that reduces its state unemployment tax rate to 4.00% of the first $7,000 paid each employee. The federal rate is 0.60%.
Apr.		15		Issued check to Swift Bank in payment of the March FICA and employee income taxes.
		15		Issued check to the State Tax Commission for the January, February, and March state unemployment taxes. Filed the check and the first-quarter tax return with the Commission.
		30		Issued check payable to Swift Bank in payment of the employer's FUTA taxes for the first quarter of the year.
		30		Filed Form 941 with the IRS, reporting the FICA taxes and the employees' federal income tax withholdings for the first quarter.

Required:
Prepare journal entries to record the transactions and events for both March and April. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field.)

Answer 1

	Employee	Cumulative Pay (Excludes Current Period)	Current Period Gross Pay			FIT Withholding	FUTA	FICA S.S. Employee	FICA Medicare Employee	Employee Plan Withholding	Employee Net Pay
			Pay Type	Pay Hours	Gross Pay	SIT Withholding	SUTA	FICA S.S. Employer	FICA Medicare Employer	Employer Plan Expense
	Kathleen	$115,550.00	Salary		$7,000.00	$2,950.00	$42.00	$434.00	$101.50	$350.00	$3,164.50
						680	$378.00			$700.00
	Anthony	5,850.00	Salary		690	118	$4.14	$42.78	$10.01	34.5	$484.72
						39	$37.26			69
	Nichole	16,900.00	Regular	80	880	148	$6.37	65.813	$15.39	$53.08	$779.22
			Overtime	11	181.5	44	$57.32			$106.15
	Zoey	6,800.00	Regular	80	880	138	$5.87	60.698	$14.20	$48.95	$717.16
			Overtime	6	99	41	$52.87			$97.90
	Gracie	5,400.00	Regular	75	825	128	$4.95	51.15	$11.96	$41.25	$592.64
			Overtime			40	$44.55			$0.00
	Totals	$150,500.00			$10,555.50	$3,482.00	$63.33	$654.44	$153.05	$527.78	$5,738.23
						$844.00	$570.00	0	0	$973.05

Journal Entries Debit Credit   

1)

Salary Expenses Correct     $ 10550..50

FICA Social Security Tax $ 654.44

FICA Medicare Employee $ 153.05

Employee federal income taxes payable $ 3482.00

Employee Plan Withholding Tax $ 527.78

Accrued payroll payable $ 5738.23     

2)

Payroll taxes expense 3257.87

Federal unemployment taxes payable $ 63.33

State unemployment taxes payable $ 570.00

FICA Medicare Employer $ 153.05

FICA-Social security taxes payable $ 654.44

Employer Plan Expense $ 973.05

SIT Withholding $ 844.00