Question

In the following summary of data for a payroll period, some amounts have been intentionally omitted:

Earnings:
1. At regular rate	?
2. At overtime rate	$66,000
3. Total earnings	?
Deductions:
4. Social security tax	37,560
5. Medicare tax	9,390
6. Income tax withheld	130,000
7. Medical insurance	21,910
8. Union dues	?
9. Total deductions	205,610
10. Net amount paid	420,390
Accounts debited:
11. Factory Wages	267,000
12. Sales Salaries	?
13. Office Salaries	100,000

	Required:
A.	Calculate the amounts omitted in lines (1), (3), (8), and (12).
B.	On December 19, journalize the entry to record the payroll accrual.*
C.	On December 20, journalize the entry to record the payment of the payroll. * Refer to the Chart of Accounts for exact wording of account titles.

Answer 1

Answer A.
Earnings
At Regular Rate ($626,000 - $66,000)	560,000.00
At Overtime Rate	66,000.00
Total Earnings ($420,390 + $205,610)	626,000.00
Deductions:
Social Security Tax	37,560.00
Medicare Tax	9,390.00
Income Tax Withheld	130,000.00
Medical Insurance	21,910.00
Union Dues - $205,610 - ($37,560 + $9,390 + $130,000 + $21,910)	6,750.00
Total Deductions	205,610.00
Net amount Paid	420,390.00
Amount Debited:
Factory Wages	267,000.00
Sales Salaries ($626,000 - $267,000 - $100,000)	259,000.00
Office Salaries	100,000.00

Answer B & C.
Journal Entry
Date	Particulars	Dr. Amt.	Cr. Amt.
B.	Wages Expense - Factory	267,000.00
	Salaries Expense - Sales	259,000.00
	Salaries Expense - Office	100,000.00
	Social Security Tax Payable		37,560.00
	Medicare Tax Payable		9,390.00
	Income Tax Withholding Payable		130,000.00
	Medical Insurance Payable		21,910.00
	Union Dues Payable		6,750.00
	Salaries & Wages Payable		420,390.00
	(To record the salaries & Wages expenses)
			.
C.	Salaries & Wages Payable	420,390.00
	Cash		420,390.00
	(To record the cash paid)