For the week ended May 16, Cheap Prinitng Company had a total payroll of 183,000
ID: 2497739 • Letter: F
Question
For the week ended May 16, Cheap Prinitng Company had a total payroll of 183,000. Threes items are withheld from employee's paycheck: (1) Social Security (FICA) tax of 7.1% of payroll (2) income taxes, which average 20% of the payroll; and (3) employees' savings that are desposited in their credit union, which are $12,020. In addion, Cheap Printing Company pays (1) Social Security tax equal to the amount withheld from employees, (2) health insurance premiums of $12,750 , and (3) contributions to the employees' pension fund of $17,000.
Prepare the journal entires to record the compenstaion expense and the employee benefit expense.
Explanation / Answer
The journal entry to record the payment of the paycheck:
The journal entry to record the payment of the Employee Benefits Expense:
DEBIT ($) CREDIT ($) Compensation Expense 183000 Social Security employee's contribution 12993 Income tax 36600 Employees Savings deposited to Credit Union 12020 Cash 121387