Problem 13-3 Employee Earnings to July 31 Weekly Pay Vacation Pay to Be Received
ID: 2525842 • Letter: P
Question
Problem 13-3
Employee
Earnings to
July 31
Weekly
Pay
Vacation Pay to Be
Received in August
Account Titles and Explanation
Debit
Credit
(To record Payroll 1.)
(To record Payroll taxes for Payroll 1.)
(To record payrolls 2 and 3.)
(To record payroll taxes for Payrolls 2 and 3.)
(To record payroll 4.)
(To record payroll taxes for payroll 4.)
(To record the monthly payment of accrued payroll liabilities.)
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Problem 13-3
Crane Company pays its office employee payroll weekly. Below is a partial list of employees and their payroll data for August. Because August is their vacation period, vacation pay is also listed.
Employee
Earnings to
July 31
Weekly
Pay
Vacation Pay to Be
Received in August
Assume that the federal income tax withheld is 10% of wages. Union dues withheld are 2% of wages. Vacations are taken the second and third weeks of August by Robbins, Kirk, and Sprouse. The state unemployment tax rate is 2.5% and the federal is 0.8%, both on a $7,000 maximum. The FICA rate is 7.65% on employee and employer on a maximum of $118,500 per employee. In addition, a 1.45% rate is charged both employer and employee for an employee’s wages in excess of $118,500.
Make the journal entries necessary for each of the four August payrolls. The entries for the payroll and for the company’s liability are made separately. Also make the entry to record the monthly payment of accrued payroll liabilities. (Round answers to 2 decimal places, e.g. 15.25. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Account Titles and Explanation
Debit
Credit
(To record Payroll 1.)
(To record Payroll taxes for Payroll 1.)
(To record payrolls 2 and 3.)
(To record payroll taxes for Payrolls 2 and 3.)
(To record payroll 4.)
(To record payroll taxes for payroll 4.)
(To record the monthly payment of accrued payroll liabilities.)
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Explanation / Answer
Wages and Salaries expense
(200+150+110+250+330)=1040
Account titles and explanation debit creditWages and Salaries expense
(200+150+110+250+330)=1040
1040 Withholding taxes payable (10%*1040) 104 FICA taxes payable (7.65%*1040) 79.50 Union dues payable (2%*1040) 20.80 Cash 835.64 (to record payroll 1) Payroll tax expense 94.74 FICA taxes payable 79.56 Federal unemployment tax payable (0.8%*(200+150+110)) 3.68 State unemployment tax payable (2.5%*460) 11.50 (to record payroll taxes for payroll 1) Vacation Wages payable (300+220+660)/2 590 Wages and Salaries expense (1040-590) 450 Withholding taxes payable (10%*1040) 104 FICA Taxes payable (7.65%*1040) 79.56 Union dues payable (2%*1040) 20.8 Cash 835.64 (to record payroll 2 and 3) Payroll tax expense 94.74 FICA taxes payable (7.65%*1040) 79.56 Federal unemployment tax payable (0.8%*460) 3.68 State unemployment tax payable (2.5%*460) 11.50 (to record payroll taxes for payroll 2 and 3) Wages and Salaries expense 1040 Withholding taxes payable 104 FICA tax payable 79.56 Union dues payable 20.80 Cash 835.64 (to record payroll 4) Payroll tax expense 94.74 FICA tax payable 79.56 Federal unemployment tax payable 3.68 State unemployment tax payable 11.50 (to record payroll taxes for payroll 4) Withholding taxes payable (104*4) 416 FICA taxes payable (79.56*8) 636.48 Union dues payable (20.80*4) 83.20 Federal unemployment tax payable (3.68*4) 14.72 State unemployment tax payable (11.50*4) 46 Cash 1196. 40 (to record the monthly payment of accrued payroll liabilities)