Reference no: EM132878066

Problem - The following information about the payroll for the week ended December 30 was obtained from the records of Arnsparger Equipment Co.:

Salaries:

Sales salaries $270,000

Warehouse salaries 142,000

Office sales 133,000

$545,000

Deductions:

Income tax withheld $95,920

Social security tax withheld 32,700

Medicare tax withheld 8,175

U.S. savings bonds 11,990

Group insurance 9,810

$158,595

Tax rates assumed:

Social security, 6%

Medicare, 1.5%

State unemployment (employer only), 4.5%

Federal unemployment (employer only), 0.8%

Required -

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, $30,000 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. Since it is a new fiscal year, all $545,000 in salaries is subject to unemployment compensation taxes.