2 PAYROLL REGISTER Salary Expense Debited Liabilities Credited Cash page 369Salary ExpenseDebitedLiabilitiesCreditedCashCreditedUntil payroll is recorded in the journal and then posted to the ledger accounts, the accounts are not up to date.
3 ANALYZING PAYMENT OF A PAYROLL page 370DeductionsTotal EarningsNet Pay
4 JOURNALIZING PAYMENT OF A PAYROLL page 371December 15. Paid cash for payroll, $4, Check No. 335.
5 Audit Your Understanding What account title is used journalize the total earnings column of the payroll register?Salary ExpenseWhat account title is used to journalize the federal income tax column of the payroll register?Employee Income Tax Payable
6 Audit Your Understanding What account title is used to journalize a Social Security tax column in the payroll register?Social Security Tax Payable
8 13-2 New VocabularyFederal Unemployment Tax: A federal tax used for state and federal administrative expenses of the unemployment programState Unemployment Tax: A state tax used to pay benefits to unemployed workers
9 UNEMPLOYMENT TAXABLE EARNINGS page 374First:Determine if the tax base has been met.2131. Enter accumulated earnings and total earnings for each employee.2. Enter any unemployment taxable earnings.3. Total the Unemployment Taxable Earnings column.
11 JOURNALIZING EMPLOYER PAYROLL TAXES page 376(continued on next slide)December 15. Recorded employer payroll taxes expense, $485.92, for the semimonthly pay period ended December 15. Taxes owed are: social security tax, $354.11; Medicare tax, $82.83; federal unemployment tax, $6.32; state employment tax, $ Memorandum No. 63.
12 JOURNALIZING EMPLOYER PAYROLL TAXES page 376(continued from previous slide)
13 Audit Your Understanding What is the tax rate Hobby Shack must pay on employees for each of the following taxes: Social Security, Medicare, federal unemployment, and state unemployment?Social Security: 6.2% of earnings up to a maximum of $87,000 in each calendar year;Medicare: 1.45% of total employee earnings;Federal unemployment: 0.8% on the first $7,000 earned by each employee;State unemployment: 5.4% on the first $7,000 earned by each employee
14 Audit Your Understanding What is the amount of each employee’s total earnings that are subject to federal and state unemployment taxes at Hobby Shack?Only the first $7,000 each employee earns
16 13-3 EMPLOYER ANNUAL REPORT TO EMPLOYEES OF TAXES WITHHELD page 378
17 EMPLOYER’S QUARTERLY FEDERAL TAX RETURN page 379(continued on next slide)121. Heading2. Number of employees
18 EMPLOYER’S QUARTERLY FEDERAL TAX RETURN page 379(continued on next slide)345673. Total quarterly earnings6. Social security plus Medicare taxes4. Income tax withheld5. Employee and employer social security and Medicare taxes7. Total taxes
19 EMPLOYER’S QUARTERLY FEDERAL TAX RETURN page 379(continued from previous slide)988. Total taxes for each month9. Total taxes
20 EMPLOYER ANNUAL REPORTING OF PAYROLL TAXES page 381
21 Audit Your Understanding When must employers provide a W–2 statement to their employees?By January 31What taxes are included in the quarterly federal tax return filed by the employer?Federal income tax, Social Security tax, and Medicare tax
26 JOURNALIZING PAYMENT OF LIABILITY FOR EMPLOYEE INCOME TAX, SOCIAL SECURITY TAX, AND MEDICARE TAX page 385January 15. Paid cash for liability for employee income tax, $757.00; social security tax, $1,451.38; and Medicare tax, $339.42; total, $2, Check No. 347.
27 PAYING THE LIABILITY FOR FEDERAL UNEMPLOYMENT TAX page 386
28 JOURNALIZING PAYMENT OF LIABILITY FOR FEDERAL UNEMPLOYMENT TAX page 387January 31. Paid cash for federal unemployment tax liability for quarter ended December 31, $ Check No. 367.12345
29 JOURNALIZING PAYMENT OF LIABILITY FOR STATE UNEMPLOYMENT TAX page 387January 31. Paid cash for state unemployment tax liability for quarter ended December 31, $ Check No. 368.
31 IQ Test (for Professionals) How do you put a giraffe into a refrigerator?Open the refrigerator door, put the giraffe in, and close the door.This question tests whether or not you do simple things in a complicated way.
32 IQ Test How do you put an elephant into a refrigerator? Open the refrigerator door, take the giraffe out, put the elephant in, and close the door.This question tests your prudence and practicality.
33 IQ TestThe Lion King is hosting an animal conference. All animals except one attend. Which one does not attend?The elephant. The elephant is still in the refrigerator.This question tests whether or not you have comprehensive thinking skills.
34 IQ TestIf you did not answer the first three questions correctly, this next question is your last chance to show your qualifications as a professional.
35 IQ TestThere is a river inhabited by crocodiles. How do you manage to get to the other side?Swim through it. All of the animals, including the crocodiles, are attending the animal conference. (Except for the elephant, of course.)
36 IQ TestDon’t be frustrated if you failed this test. According to Anderson Consulting Worldwide, about 90% of the professionals failed the test.However, many preschoolers got it correct, thus disproving the popular theory that most “professionals” have the brains of a four-year old.