Critical Thinking Problem $10\mathrm{.}1($Algo$)$ Payroll Accounting LO $10-2,10-3,10-4,10-5,10-6,10-7$

Beach Vacations pays salaries and wages on the last day of each month. Payments made on December $31,20$X$1,$ for amounts incurred

during December are shown below. Cumulative amounts paid prior to the December $31$ payroll for the persons named are also shown.

a$.$ Francis Fisher, president, gross monthly salary, $$11,820$; gross earnings paid prior to December $31,$$$132,250.$

b$.$ Sandy Swartz, vice president, gross monthly salary, $$11,350$; gross earnings paid prior to December $31,$$$113,500.$

c$.$ Juan Rios, independent accountant who audits the company's accounts and performs certain consulting services, $$11,350$; gross

amount paid prior to December $31,$$$28,375.$

d$.$ Harry House, treasurer, gross monthly salary, $$5,950$; gross earnings paid prior to December $31,$$$65,450.$

e$.$ Payment to Daily Security Services for Eddie Martin, a security guard who is on duty on Saturdays and Sundays, $$1,270$; amount

paid to Daily Security Services prior to December $31,$$$12,700.$

Required:

Assume a $1\mathrm{.}45$ percent Medicare tax rate on all salaries and wages earned by the employee during the year. Assume a $6\mathrm{.}2$

percent social security rate on the first $$132,900$ earned by the employee during the year and prepare a schedule showing the

following information:

a$.$ Each employee's cumulative earnings prior to December $31.$

b$.$ Each employee's gross earnings for December.

c$.$ The amounts to be withheld for each payroll tax from each employee's earnings $($employee income tax withholdings for

Fisher are $$3,260$; for Swartz, $$2,680$; and for House, $$980).$

d$.$ The net amount due each employee.

e$.$ The total gross earnings, the total of each payroll tax deduction, and the total net amount payable to employees.

Record the general journal entry for the company's payroll on December $31.$

Record the general journal entry for payments to employees on December $31.$

Analyze:

What is the balance of the Salaries Payable account after all payroll entries have been posted for the month?

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