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.