QuestionJournalize Period Payroll
The payroll register of Chen Engineering Co, indicates of social security withheld and of Medicare tax withheld on total salaries of for the period. Retirement savings withheld from employee paychecks were for the period. Federal withholding for the period totaled .
Provide the journal entry for the period's payroll. If an amount box does not require an entry, leave it blank.
Studdy Solution
STEP 1
What is this asking? We need to record the financial transactions related to Chen Engineering Co.'s payroll for a specific period. Watch out! Don't forget that the company also contributes to social security and Medicare taxes, matching the employee withholdings.
STEP 2
1. Calculate the company's share of payroll taxes.
2. Determine total payroll expenses.
3. Prepare the journal entry.
STEP 3
Alright, let's **calculate** the company's portion of social security and Medicare!
Since the company matches the employee contributions, the company's social security contribution is also .
Easy peasy!
STEP 4
Similarly, the company's Medicare contribution matches the employee withholdings, which is .
Boom!
STEP 5
Now, let's **add up** all the **payroll costs**.
This includes the salaries, the employee withholdings, and the company's matching contributions.
STEP 6
The **total salaries** are .
The **employee retirement savings** are .
The **federal withholdings** are .
The **employee social security** is , and the **company's match** is another .
The **employee Medicare** is , and the **company's match** is another .
STEP 7
So, the **grand total** is: Wow, that's a lot of money!
STEP 8
Time to **record** this in a journal entry!
We'll **debit** *Salaries Expense* for the gross salaries paid, which is .
STEP 9
We'll **credit** *Salaries Payable* for the net amount employees receive after all the withholdings.
This is calculated as:
STEP 10
We also need to **credit** all the payable accounts for the withholdings and matching contributions.
So, we'll **credit** *Retirement Savings Payable* for , *Federal Withholding Payable* for , *Social Security Tax Payable* for the combined employee and employer contributions (), and *Medicare Tax Payable* for the combined employee and employer contributions ().
STEP 11
The journal entry is as follows:
* Debit *Salaries Expense*
* Credit *Salaries Payable*
* Credit *Retirement Savings Payable*
* Credit *Federal Withholding Payable*
* Credit *Social Security Tax Payable*
* Credit *Medicare Tax Payable*
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