Question

Natural Hair reports the following payroll information for May, 2015:

Type of	Gross	Federal Income	Savings Bonds
Salary	Pay	Tax Withheld	Withheld
Sales	$10,000	$2,200	$200
Office	3,000	600	300
Total	$13,000	$2,800	$500

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Tax rate information follows:

FICA	7.0%
Federal unemployment	0.8%
State unemployment	5.4%

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Assume that all wages are subject to all payroll taxes.

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Required:

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Prepare the journal entries to record the payment of the May, 2015, payroll and to record the payroll taxes imposed on the employer.

Answer 1

Date	Account Titles and Explanation	Debit	Credit
May 31, 2015	Sales salaries and wages expense	10000
	Office salaries and wages expense	3000
	FICA taxes payable ($13000 x 7%)		910
	Savings bonds withheld		500
	Federal income taxes withheld		2800
	Cash		8790
	(To record payment of May payroll)
May 31, 2015	Payroll taxes expense	1716
	FICA taxes payable ($13000 x 7%)		910
	Federal unemployment taxes payable ($13000 x 0.8%)		104
	State unemployment taxes payable ($13000 x 5.4%)		702
	(To record employer's payroll taxes)