Journalizing Payroll Review

Lesson 13-1 Source of amounts for payroll journal transaction

Salary Expense Dec. 15 8, Employee Income Tax Payable Dec Social Security Tax Payable Dec Medicare Tax Payable Dec Health Insurance Premiums Payable Dec Retirement Contributions Payable Dec Dec. 15 6, Cash Lesson 13-1 = The debit to Salary Expense is the Total Earnings for the pay period. The credit to Cash is the Net Pay for the pay period.

December 15. Paid cash for semimonthly payroll, $6, (total payroll, $8,076.75, less deductions: employee income tax, $494.00; social security tax, $500.77; Medicare tax, $117.11; health insurance premiums, $230.00; retirement contributions, $465.00). Check No Lesson Date 3 3 Check NumberAccount Debited 2 2 Total Earnings 4 4 Accounts Credited 6 6 Payroll Deductions 7 7 Amount Paid to Employees 5 5

Lesson 13-2 THREEΔGREEN PRODUCTS, INC. Calculation of FUTA Earnings for December 15, 20-- Pay Period Employee Prior Accumulated Earnings Earnings to Equal FUTA Tax Base Earnings for Current Pay PeriodFUTA Earnings Butler, John P.$27,195.00$ 0.00$1,466.25$ 0.00 Feng, Anthony R. 5, , , Lendsey, Ann C. 1, , Prisock, Mary G. 44, , Swann, Justin A. 16, , Wells, Cary B.6, , $2, Enter prior accumulated earnings 1 1 Enter the difference between the FUTA tax base and prior accumulated earnings 2 2 Enter earnings for the current pay period 3 3 Enter the FUTA earnings 4 4

December 15. Recorded employer payroll taxes expense, $757.01, for the semimonthly pay period ended December 15. Taxes owed are: social security tax, $500.77; Medicare tax, $117.11; federal unemployment tax, $17.95; state unemployment tax, $ Memorandum No. 44. Lesson 13-2 Payroll Taxes Expense Dec Social Security Tax Payable Dec Medicare Tax Payable Dec Unemployment Tax Payable—Federal Dec Unemployment Tax Payable—State Dec General Journal Entry: Add up the four taxes to get the amount to debit Payroll Tax Expense

Lesson Date 3 3 Memorandum NumberAccount Debited 2 2 Amount Debited 4 4 Accounts Credited 5 5 Amounts Credited 6 6

Lesson 13-3 It’s the Law! Employer must provide employee with the W-2 by January 31.

Jan. 15 Bal Dec Dec Jan. 15 Bal Employee Income Tax Payable January 15. Paid cash for liability for employee income tax, $998.00; social security tax, $2,023.06; and Medicare tax, $473.14; total, $3, Check No Lesson 13-4 Cash Jan. 153, Social Security Tax Payable Dec Dec Jan. 15 Bal 2, Jan. 15 Bal Medicare Tax Payable Dec Dec Jan. 15 Bal Employer and Employee SS taxes Employer and Employee Medicare taxes for the month Employee income taxes Debit Payables and credit cash.

Lesson Date 3 3 Check NumberAccounts Debited 2 2 Debit Amounts 4 4 Check Amount 5 5

January 31. Paid cash for federal unemployment (FUTA) tax liability for quarter ended December 31, $ Check No Lesson 13-4 Cash Jan Unemployment Tax Payable—Federal Nov. 30 Bal Dec Dec Jan. 31 Bal297.02Dec. 31 Bal Date 3 3 Check NumberAccount Debited 2 2 Debit Amount 4 4 Check Amount 5 5

January 31. Paid cash for state unemployment (SUTA) tax liability for quarter ended December 31, $ Check No Lesson 13-4 Cash Jan Unemployment Tax Payable—State Nov. 30 Bal Dec Dec Jan. 31 Bal147.42Dec. 31 Bal Date 3 3 Check NumberAccount Debited 2 2 Debit Amount 4 4 Check Amount 5 5

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