Payroll

1
ACCOUNTING-I
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• Payroll
• Journal Entries

2
Journalizing Employee Payroll Expenses --
Transaction 1
Source Payroll Register
DEBIT Salary Expense (Total Earnings column
total) CREDITS (all deduction column
totals) ? Employee Income Tax Payable ? FICA
Tax Payable ? Employee Choices (all totals on
register) Ex. Health Ins. Payable US
Savings Bonds Payable United Way Payable ?
Cash (Net Pay/ value of check to Payroll
Acct.) A cash payment is ALWAYS a credit!
3
Journalizing Employer Payroll Expenses--
Transaction 2
Source Calculations
DEBIT Payroll Taxes Expense (total
credits) CREDITS FICA Tax Payable (SS
Medicare appropriate amount/each) Federal
Unemployment Tax Payable (.008 appropriate
amount) State Unemployment Tax
Payable (.054 appropriate amount)
Remember Current amounts are different from the
ones used in text problems.
Drill 1
4
Employers FICA TaxTransaction 2
Calculation
On earnings of each employee Social Security
.065 total earnings up to 55,500/employee/yr M
edicare .015 total earnings up to 130,200
/employee/yr
Journal Entry
5
Employers Fed. Unemp. TaxTransaction 2
Calculation

• .008 total earnings up to 7,000/employee/yr

Journal Entry
6
Employers State Unemp. TaxTransaction 2
Calculation

• .054 total earnings up to 7,000/employee/yr

Note payable depends on state standards
Journal Entry
7
Drill 1 Company A
T Accounts Amount Sources
Cash
6,930
Net Pay gt Register
Employee Income Tax Payable
Column Total gt Register
1,350
FICA Tax Payable
Employee gt Register Employer gt Calculation
720 720
Unemp Tax Payable--Federal
72
Employer gt Calculation
Unemp Tax Payable--State
486
Employer gt Calculation
Payroll Taxes Expense
1,278
Dr 3 Employer Calculations
Salary Expense
9,000
Dr Total Earnings gt Register
8
Drill 1 Company A Transaction 1
T Accounts Amount Sources
Cash
6,930
Net Pay gt Register
Employee Income Tax Payable
Column Total gt Register
1,350
FICA Tax Payable
Employee gt Register
720

Salary Expense
9,000
Dr Total Earnings gt Register
9
Drill 1 Company A Transaction 2
T Accounts Amount Sources
FICA Tax Payable
Employer gt Calculation
720
Unemp Tax Payable--Federal
72
Employer gt Calculation
Unemp Tax Payable--State
486
Employer gt Calculation
Payroll Taxes Expense
1,278
Dr 3 Employer Calculations
10
Drill 1 Company B
T Accounts Amount Sources
Cash
3,274.00
Net Pay gt Register
Employee Income Tax Payable
Column Total gt Register
590.00
FICA Tax Payable
Employee gt Register Employer gt Calculation
336.00 336.00
Unemp Tax Payable--Federal
33.60
Employer gt Calculation
Unemp Tax Payable--State
226.80
Employer gt Calculation
Payroll Taxes Expense
596.40
Dr 3 Employer Calculations
Salary Expense
4,200.00
Dr Total Earnings gt Register
11
Drill 1 Company B Transaction 1
T Accounts Amount Sources
Cash
3,274.00
Net Pay gt Register
Employee Income Tax Payable
Column Total gt Register
590.00
FICA Tax Payable
Employee gt Register
336.00

Salary Expense
4,200.00
Dr Total Earnings gt Register
12
Drill 1 Company B Transaction 2
T Accounts Amount Sources
FICA Tax Payable
Employer gt Calculation
336.00
Unemp Tax Payable--Federal
590.00
Employer gt Calculation
Unemp Tax Payable--State
226.80
Employer gt Calculation
Payroll Taxes Expense
596.40
Dr 3 Employer Calculations