Question

During the month of March, Pharoah Company’s employees earned wages of $77,000. Withholdings related to these wages were $5,891 for Social Security (FICA), $9,023 for federal income tax, $3,730 for state income tax, and $481 for union dues. The company incurred no cost related to these earnings for federal unemployment tax but incurred $842 for state unemployment tax.

Part 1

Prepare the necessary March 31 journal entry to record salaries and wages expense and salaries and wages payable. Assume that wages earned during March will be paid during April. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
Mar. 31	enter an account title for the journal entry on March 31	enter a debit amount	enter a credit amount
	enter an account title for the journal entry on March 31	enter a debit amount	enter a credit amount
	enter an account title for the journal entry on March 31	enter a debit amount	enter a credit amount
	enter an account title for the journal entry on March 31	enter a debit amount	enter a credit amount
	enter an account title for the journal entry on March 31	enter a debit amount	enter a credit amount
	enter an account title for the journal entry on March 31	enter a debit amount	enter a credit amount

eTextbook and Media

List of Accounts

Part 2

Prepare the entry to record the company’s payroll tax expense. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Date	Account Titles and Explanation	Debit	Credit
Mar. 31	enter an account title for the journal entry on March 31 to record the company’s payroll tax expense	enter a debit amount	enter a credit amount
	enter an account title for the journal entry on March 31 to record the company’s payroll tax expense	enter a debit amount	enter a credit amount
	enter an account title for the journal entry on March 31 to record the company’s payroll tax expense	enter a debit amount	enter a credit amount

Answer 1

Date	Account Titles and Explanation	Debit	Credit
Mar. 31	Salaries and wages expense	77000
	FICA taxes payable		5891
	Federal Income Tax Payable		9023
	State Income Tax Payable		3730
	Union Dues Payable		481
	Salaries and Wages Payable		57875
Date	Account Titles and Explanation	Debit	Credit
Mar. 31	Payroll tax expense	6733
	FICA taxes payable		5891
	State unemployment tax payable		842