Question

Record Payroll Expense and Payroll Tax Expense

The following totals for the month of September were taken from the payroll register of Mindless Company. Use this information to answer questions 6 and 7.

Salaries                           $24,000       Federal income taxes withheld      5,000 FICA taxes withheld                       1,100       Federal Unemployment Taxes            64

State Unemployment Taxes              432

6. What is the journal entry to record the monthly payroll expense on September 30?

a. Increase Salaries and Wages Expense $24,000; Decrease Cash $24,000

b. Increase Salaries and Wages Expense $30,596; Increase Payroll Taxes Payable $6,596; Increase Salaries and Wages Payable $24,000

c. Increase Salaries and Wages Expense $24,000; Increase FICA Taxes Payable $1,100; Increase Federal Income Taxes Payable $5,000; Increase Salaries and Wages Payable $17,900

d. Increase Payroll Tax Expense $6,596; Increase Payroll Taxes Payable $6,596

e. Increase Salaries and Wages Expense $30,100; Increase Salaries and Wages Payable $30,100

7. Refer to Mindless Company above. What entry records the accrual of the employer’s payroll taxes?

a. Increase Payroll Tax Expense $6,596; Increase Payroll Taxes Payable $6,596

b. Increase Payroll Tax Expense $1,596; Increase Payroll Taxes Payable $1,596

c. Decrease Payroll Taxes Payable $6,596; Decrease Cash $6,596

d. Increase Salaries and Wages Expense $24,000; Increase Payroll Taxes Payable $6,596; Increase Salaries and Wages Payable $17,404

e. Increase Salaries and Wages Expense $30,596; Increase Payroll Taxes Payable $6,596; Increase Salaries and Wages Payable $24,000

8. Assume that Social Security taxes are payable at a rate of 6% on the first $100,000 of earnings, Medicare taxes are payable at a 1.5% rate with no maximum earnings, and that federal and state unemployment compensation taxes total 4.6% on the first $7,000 of employee earnings. An employee, George Jones, earns $2,500 for the current week. His year-to-date earnings before this week were $6,800. His federal income tax withholding is $600. What are the total employer payroll taxes related to the current week?

a. $384.20

b. $902.50

c. $796.70

d. $302.50

e. $196.70

Calculate Salaries Payable

9. Jenning Company has the following information for the pay period of January 15 - 31, 2016.          

Gross payroll          $10,000              Federal income tax withheld               $1,500           Social security rate          6%            Federal unemployment tax rate               .8%           Medicare rate               1.5%                  State unemployment tax rate                 5.4%

When Jenning calculates its entry for payroll, Salaries Payable would be recorded for what amount?

a. $10,000

b. $ 6,380

c. $ 7,000

d. $ 7,750

e. $ 7,130

Calculate Payroll Tax Expense

10. Jenning Company has the following information for the pay period of January 15 - 31, 2016.

      Gross payroll         $10,000              Federal income tax withheld               $1,500           Social security rate          6%            Federal unemployment tax rate               .8%           Medicare rate               1.5%                  State unemployment tax rate                 5.4%

Since it’s the first month of the year, assume all wages are subject to federal and state unemployment taxes. On payday, Payroll Taxes Expense would be recorded for what amount?

a. $1,164.50

b. $3,620.00

c. $2,120.00

d. $1,370.00

e. $ 620.00

Answer 1

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