According to a summary of the payroll of Guthrie Co., $600,000 was subject to the 6.0%...

 

   

Transcribed Image Text:

According to a summary of the payroll of Guthrie Co., $600,000 was subject to the 6.0% social security tax and the 1.5% Medicare tax. Also, $56,000 was subject to state and federal unemployment taxes. Required: a. Compute the employer's payroll taxes, using the following rates: state unemployment, 5.4% federal unemployment, 0.6% b. On December 31. journalize the entry to record the accrual of payrol taxes. Reter to the chart of accounts for the axact wording ol he account itlos. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW oumals will automatically indent a credit entry when a credit amount is enterad. CHART OF ACCOUNTS Guthrie Co. General Ledger ASSETS REVENUE 110 Cash 410 Sales 111 Accounts Receivable 610 Interest Revenue 112 Interest Receivable 113 Notes Receivable EXPENSES 115 Merchandise Inventory 510 Cost of Merchandise Sold 116 Supplies 520 Salaries Expense 118 Prepaid Insurance 524 Depreciation Expense-Building 120 Land 525 Delivery Expense 123 Building 526 Repairs Expense 124 Accumulated Depreciation-Building 529 Selling Expenses 531 Rent Expense 125 Office Equipment 126 Accumulated Depreciation-Office Equipment 532 Depreciation Experise-Office Equipment 533 Insurance Expense LIABILITIES 534 Supplies Expense 535 Payrol Tax Expense 210 Accounts Payable 536 Vacation Pay Expense 213 Interest Payable 537 Pension Expense 214 Notes Payable 538 Cash Short and Over 215 Salaries Payable 539 Product Warranty Expense 216 Social Security Tax Payable 215 Salaries Payable 538 Cash Short and Over 216 Social Security Tax Payable 539 Product Warranty Expense 217 Medicare Tax Payable 540 Damage Awards and Fines 218 Employees Federal Income Tax Payable 541 Miscellaneous Expense 219 Employees State Income Tax Payable 710 Interest Expense 221 Retirement Savings Deductions Payable 224 Federal Unemployment Tax Payable 225 State Unemployment Tax Payable 226 Vacation Pay Payable 227 Unfunded Persion Liability 228 Product Warranty Payable 229 EPA Fines Payable 230 Litigation Claims Payable EQUITY 310 Owner, Capital 311 Owner, Drawing According to a summary of the payroll of Guthrie Co., $600,000 was subject to the 6.0% social security tax and the 1.5% Medicare tax. Also, $56,000 was subject to state and federal unemployment taxes. Required: a. Compute the employer's payroll taxes, using the following rates: state unemployment, 5.4% federal unemployment, 0.6% b. On December 31. journalize the entry to record the accrual of payrol taxes. Reter to the chart of accounts for the axact wording ol he account itlos. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW oumals will automatically indent a credit entry when a credit amount is enterad. CHART OF ACCOUNTS Guthrie Co. General Ledger ASSETS REVENUE 110 Cash 410 Sales 111 Accounts Receivable 610 Interest Revenue 112 Interest Receivable 113 Notes Receivable EXPENSES 115 Merchandise Inventory 510 Cost of Merchandise Sold 116 Supplies 520 Salaries Expense 118 Prepaid Insurance 524 Depreciation Expense-Building 120 Land 525 Delivery Expense 123 Building 526 Repairs Expense 124 Accumulated Depreciation-Building 529 Selling Expenses 531 Rent Expense 125 Office Equipment 126 Accumulated Depreciation-Office Equipment 532 Depreciation Experise-Office Equipment 533 Insurance Expense LIABILITIES 534 Supplies Expense 535 Payrol Tax Expense 210 Accounts Payable 536 Vacation Pay Expense 213 Interest Payable 537 Pension Expense 214 Notes Payable 538 Cash Short and Over 215 Salaries Payable 539 Product Warranty Expense 216 Social Security Tax Payable 215 Salaries Payable 538 Cash Short and Over 216 Social Security Tax Payable 539 Product Warranty Expense 217 Medicare Tax Payable 540 Damage Awards and Fines 218 Employees Federal Income Tax Payable 541 Miscellaneous Expense 219 Employees State Income Tax Payable 710 Interest Expense 221 Retirement Savings Deductions Payable 224 Federal Unemployment Tax Payable 225 State Unemployment Tax Payable 226 Vacation Pay Payable 227 Unfunded Persion Liability 228 Product Warranty Payable 229 EPA Fines Payable 230 Litigation Claims Payable EQUITY 310 Owner, Capital 311 Owner, Drawing