Payroll Accounting 2015 25th Edition

Bieg Solutions Manual

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 CHAPTER 6
Learning Objectives
After studying this chapter, students should be able to:

1. Record payrolls in payroll registers and post to employees’ earnings records.

2. Understand the various deductions—both voluntary and involuntary (taxes and
garnishments)—that are taken out of employees’ gross pay.
3. Journalize the entries to record the payroll and payroll taxes.
4. Post to the various general ledger accounts that are used to accumulate
information from the payroll entries.
5. Explain the recording of the payroll tax deposits.
6. Understand the need for end-of-period adjustments.

Contents
Chapter 6 outline:
LEARNING OBJECTIVES
THE PAYROLL REGISTER
Proving the Totals of the Payroll Register
Using the Information in the Payroll Register
THE EMPLOYEE’S EARNINGS RECORD
RECORDING THE GROSS PAYROLL AND WITHHOLDINGS
Gross Payroll
FICA Taxes—Employee
Federal Income Taxes
State and City Income Taxes
Employees’ Contributions to State Funds
Other Payroll Deductions
Group Insurance
Health Insurance
Purchase of Government Savings Bonds
Union Dues
Garnishment of Wages
Child Support
Federal Tax Levy
Pension and Retirement Contributions
Net Pay

6–1
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6–2 Payroll Accounting

METHODS OF PAYING WAGES AND SALARIES

Paying in Cash
Paying by Check
Paying by Electronic Transfer
Pay Cards
Electronic Paystub
Final Pay
Unclaimed Wages
RECORDING PAYROLL TAXES
FICA Taxes—Employer
SUTA Taxes
FUTA Tax
Entries to Record Wages and Payroll Taxes
RECORDING WORKERS’ COMPENSATION INSURANCE EXPENSE
RECORDING THE DEPOSIT OR PAYMENT OF PAYROLL TAXES
Depositing FICA Taxes and Federal Income Taxes Withheld
Paying State or City Income Taxes
Paying FUTA and SUTA Taxes
RECORDING END-OF-PERIOD ADJUSTMENTS
Wages
Vacation Pay
SUMMARY OF ACCOUNTS USED IN RECORDING PAYROLL TRANSACTIONS
ILLUSTRATIVE CASE
KEY TERMS
KEY POINTS SUMMARY

Matching Quiz (p. 6–32)

1. E 6. I
2. C 7. J
3. H 8. F
4. G 9. D
5. A 10. B

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Chapter 6 6–3

Questions for Review (p. 6–33)

1. The main kinds of information contained in a payroll register include period covered
by the payroll, name of each employee, marital status and number of withholding
allowances for each employee, a record of time worked (regular hours and overtime
hours), regular and overtime pay rates, total earnings, deductions from total
earnings, net pay for each worker, and taxable earnings columns.
2. Distribution columns are sometimes provided in the payroll register in order to classify
the wages and salaries according to the nature of the wage and salary expense, such
as “Sales Salaries,” “Office Salaries,” and “Plant Wages.” The total of each distribution
column shows the total amount of wages or salaries for that particular operating ex-
pense.
3. The Cumulative column in the employee’s earnings record is used to record the to-
tal amount of accumulated wages each pay period so that the cutoff point for each
employee for FICA (OASDI), FUTA, and SUTA can be easily determined. When a
worker’s wages reach the cutoff point for a particular payroll tax, the wages are no
longer subject to that tax.
4. No, a separate account should be kept in the general ledger for recording the
employer’s liability for each of the three kinds of income tax withheld. Thus, at the
time of depositing the federal income taxes withheld and submitting to the state and
the city the withheld amounts, the employer can easily determine the appropriate
amount of each separate income tax by referring to the appropriate ledger account
balance.
5. Garnishment refers to the legal or equitable procedure by means of which a portion
of the wages of any person must be withheld for payment of a debt. Through the
garnishment process, a creditor, with the aid of the courts, may require the employ-
er to hold back a portion of the debtor’s wages and pay that amount to the court or
to the creditor.
6. In regard to wage attachments, the following priority withholding orders apply:
(1) bankruptcy; (2) federal tax levies and child support orders, whichever is deli-
vered first; and (3) creditor, student loan, or federal administrative wage garnish-
ments.
7. The maximum amount of wages subject to a student loan garnishment is 15 percent
of disposable earnings.
8. The only portions of an employee’s wages exempt from a federal tax levy are the
taxpayer’s standard deduction and taxpayer’s personal exemptions allowed for the
tax year prorated over the total number of pays in a year.
9. The amounts withheld for employees’ contributions into their 401(k) plans are
recorded like any other liability. These amounts are credited to the appropriate
liability account in the payroll entry. This liability account will later be debited when
the funds are transferred into the designated investment fund.

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6–4 Payroll Accounting

10. These employees are given payroll cards that allow employers to deposit em-
ployees’ pay directly into a prepaid card issued to the employee. The card can then
be used like a debit or credit card to access cash at certain automated teller ma-
chines. These cards will then be “reloaded” each payday with the employee’s net
pay.
11. The information will be made available through a secure Web site, kiosk, or interac-
tive voice response system.
12. The uniform law followed by most states provides that the holder of this unclaimed
property must file a report after a specified statutory period and then surrender the
money to the state as abandoned property.
13. Those special accounts that must usually be opened in the general ledger to record
payroll tax entries include:
Payroll Taxes
FICA Taxes Payable—OASDI
FICA Taxes Payable—HI
FUTA Taxes Payable
SUTA Taxes Payable
14. No. Since FICA and FUTA taxes are social security taxes, they may be recorded in
the same expense account. However, there is no objection to keeping separate ex-
pense accounts for these taxes if the employer so desires.
15. a. A debit to Wages increases operating expenses and decreases the cash ac-
count. The increase in operating expenses reduces owner’s equity. Liabilities are
not affected by the posting unless the total net pay is being accrued; in such a
case, the asset account Cash is not decreased until the liability is removed.
b. A credit to FICA Taxes Payable—HI increases liabilities. If the credit represents
withholdings from the employees’ gross earnings, the credit to the cash account
in the payroll entry is reduced as a result of a lesser amount of net pay being
paid the workers. If the credit represents the employer’s contribution for FICA
Taxes—HI, the expense account Payroll Taxes is being increased (debited), thus
reducing the owner’s equity.
c. A debit to SUTA Taxes Payable decreases liabilities. The cash account is also
decreased (credited) when this liability is being paid. Owner’s equity is not af-
fected by the debit.
d. A credit to Cash decreases assets. If the credit represents the payment of a lia-
bility, the liabilities are being decreased (debited). If the credit represents the
payment of an expense, the owner’s equity is being decreased.
16. When computing the cost of workers’ compensation insurance, employees should
be classified by the kind of work performed, since the premium rate for workers’
compensation insurance varies with the hazard involved in the work performed.

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Chapter 6 6–5

17. When the employer records the deposit of FICA taxes and federal income taxes
withheld, the following entry is made:
FICA Taxes Payable—OASDI ......................................... XXX
FICA Taxes Payable—HI ................................................. XXX
Employees FIT Payable ................................................... XXX
Cash ....................................................................... XXX
To record payment of the FICA taxes and the federal
income taxes withheld.
18. In order to save the time of accumulating timesheets for a portion of a week, the
amount of the adjustment could be based on a percentage of the prior week’s pay.
This percentage would be based on the number of workdays to be accrued divided
by the total number of workdays in a weekly payroll.
19. The expenses of these benefits are recorded in the periods when the employees
earn them. The liability to the employer is created during the employees’ working
years and must be recorded over those years.
20. The expenses incurred include wages and salaries, payroll taxes, workers’ com-
pensation insurance, vacation benefits expense, and pension benefits.

Questions for Discussion (p. 6–33)

1. The CCPA protects employees with a garnishment for a single indebtedness from
discharge and this would include any adverse action that interrupts employment to
a degree that the employee would look for another job. A long suspension would be
considered the equivalent of a termination of employment. A demotion and/or
transfer is considered a constructive discharge in violation of the CCPA.1
2. Some of the costs that a company might incur as a result of its salary payments in-
clude:
a. Wages and salary expense—gross wages and salaries.
b. Payroll taxes—FICA taxes, FUTA tax, and SUTA tax.
c. Workers’ compensation insurance expense.
d. Health insurance and dental insurance plans—wholly or partially employer
financed.
e. Pension plan—wholly or partially employer financed.
f. Savings plan—employer’s matching of the employees’ deposits.
Other employee benefits that may be cited by students include: group life insur-
ance, sick leave, maternity and paternity leave, disability income, profit-sharing
plans, employee stock ownership plans, vacations, holidays, Christmas bonuses,
food services, educational assistance, and prepaid legal service plans.

1
Payroll Currently, January 9, 2009, Issue #1, p. 2.

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6–6 Payroll Accounting

3. Since an exempt employee must be paid a salary each payday, the company would
not be allowed arbitrarily to take the salary back in subsequent pays. An arrangement
could be made with the employee in which the employee voluntarily agrees to a pay-
back plan and authorizes the company to take a certain amount out of subsequent
paychecks. This arrangement should be in writing and signed by the employee.

Problem Sets (p. 6–35)

The principles and practices of payroll accounting discussed in Chapter 6 are applied in
the Problem Sets as shown below.

Principle or Practice Problem Set No. (A and B)

1. Calculating garnishments. 6–1, 6–2
2. Recording payrolls and payroll tax entries. 6–3 through 6–16
3. Determining cash payments to employees. 6–5, 6–6
4. Calculating workers’ compensation 6–13
insurance expense.
5. Recording vacation benefit expense. 6–14
6. Calculating the taxes withheld from employees’ 6–15
pay and the employer’s payroll taxes.
7. Journalizing and posting payroll, payroll taxes, 6–16
and deposits for a quarter of a year.

Solutions—Problem Set A

6–1A. Take-home pay .................................................... $ 1,020.00

Standard deduction $12,400
Personal exemptions $3,950 × 3) = 11,850
$24,250 ÷ 52 = 466.35
Federal tax levy .................................................... $ 553.65
6–2A. (a) Disposable earnings [exclude health insurance,
credit union, United Fund ($730 – $72.00 – $45.26 –
$10.59 – $36.50 – $8.61)] .................................... $ 557.04
(b) Pay subject to garnishment ($557.04 × 0.25) ....... $ 139.26

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Chapter 6 6–7

6–3A. (a) Wages..................................................................... 8,500.00

FICA Taxes Payable—OASDI ........................... 527.00
FICA Taxes Payable—HI .................................. 123.25
Employees FIT Payable .................................... 1,040.00
Cash .................................................................. 6,809.75
Payroll Taxes .......................................................... 650.25
FICA Taxes Payable—OASDI ........................... 527.00
FICA Taxes Payable—HI .................................. 123.25
(b) FICA Taxes Payable—OASDI ................................ 1,054.00
FICA Taxes Payable—HI ........................................ 246.50
Employees FIT Payable .......................................... 1,040.00
Cash .................................................................. 2,340.50
6–4A. Wages..................................................................... 4,690.00
FICA Taxes Payable—OASDI ........................... 290.78
FICA Taxes Payable—HI .................................. 68.01
Employees FIT Payable .................................... 685.00
Cash .................................................................. 3,646.21
Payroll Taxes .......................................................... 555.77
FICA Taxes Payable—OASDI ........................... 290.78
FICA Taxes Payable—HI .................................. 68.01
FUTA Taxes Payable ........................................ 28.14
SUTA Taxes Payable ........................................ 168.84
6–5A. (a) Wages..................................................................... 67,000.00
FICA Taxes Payable—OASDI ........................... 3,958.70
FICA Taxes Payable—HI .................................. 971.50
Employees FIT Payable .................................... 9,911.00
Employees SIT Payable .................................... 1,410.00
Cash .................................................................. 50,748.80
Payroll Taxes .......................................................... 5,414.30
FICA Taxes Payable—OASDI ........................... 3,958.70
FICA Taxes Payable—HI .................................. 971.50
FUTA Taxes Payable ........................................ 61.80
SUTA Taxes Payable ........................................ 422.30
(b) Wages..................................................................... 67,000.00
FICA Taxes Payable—OASDI ........................... 3,958.70
FICA Taxes Payable—HI .................................. 971.50
Employees Disability Contributions Payable ..... 621.00
Employees FIT Payable .................................... 9,911.00
Employees SIT Payable .................................... 1,410.00
Cash .................................................................. 50,127.80

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6–8 Payroll Accounting

6–6A. For Period Ending August 15, 20--

PAULEY, INC.
Supplementary Payroll Sheet
Net
Amount Bills Coins
Employee Paid $20 $10 $5 $1 50¢ 25¢ 10¢ 5¢ 1¢
Chad T. Biskis $ 251.75 12 1 1 1 1
Nicole A. Cibik 256.52 12 1 1 1 1 2
Domingo M. Diaz 384.94 19 4 1 1 1 1 4
Laura B. Elias 202.59 10 2 1 1 4
Ari M. Fleischer 253.64 12 1 3 1 1 4
Diane Y. Germano 296.50 14 1 1 1 1
Arnold B. Herst 594.26 29 1 4 1 1
Edward C. Kenner 399.89 19 1 1 4 1 1 1 4
Kathleen J. Marfia 234.01 11 1 4 1
Kimberly A. Picket 595.80 29 1 1 1 1 1
Total $3,469.90 167 8 4 24 8 5 3 3 20

6–7A. Wages ...................................................................... 1,500.00

FICA Taxes Payable—OASDI ............................ 93.00
FICA Taxes Payable—HI ................................... 21.75
Employees FIT Payable ..................................... 232.00
Employees SIT Payable ..................................... 51.04
Retirement Plan Contributions Payable ............. 45.00
Garnishment Payable ......................................... 100.00
Health Insurance Premiums Payable ................. 95.00
Cash ................................................................... 862.21
Payroll Taxes ........................................................... 114.75
FICA Taxes Payable—OASDI ............................ 93.00
FICA Taxes Payable—HI ................................... 21.75

6–8A. Wages ...................................................................... 12,000.00

FICA Taxes Payable—OASDI ............................ 744.00
FICA Taxes Payable—HI ................................... 174.00
Employees FIT Payable ..................................... 260.00
SUTA Taxes Payable ......................................... 49.00
Cash ................................................................... 10,773.00
Payroll Taxes ........................................................... 1,261.00
FICA Taxes Payable—OASDI ............................ 744.00
FICA Taxes Payable—HI ................................... 174.00
FUTA Taxes Payable ......................................... 58.80
SUTA Taxes Payable ......................................... 284.20

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Chapter 6 6–9

6–9A. Wages ..................................................................... 17,210.00

FICA Taxes Payable—OASDI ........................... 1,067.02
FICA Taxes Payable—HI ................................... 249.55
Employees FIT Payable ..................................... 1,890.00
Employees SIT Payable .................................... 369.40
Group Insurance Premiums Collected ............... 193.00
Cash ................................................................... 13,441.03
Payroll Taxes ........................................................... 2,022.18
FICA Taxes Payable—OASDI ........................... 1,067.02
FICA Taxes Payable—HI ................................... 249.55
FUTA Taxes Payable ......................................... 103.26
SUTA Taxes Payable......................................... 602.35

6–10A. FUTA Taxes Payable .............................................. 98.75

Cash ................................................................... 98.75

6–11A. Wages ..................................................................... 13,060.00

Wages Payable .................................................. 13,060.00

6–12A. (a) $1,104

(b) 92
(c) $1,196
(d) Salary Expense ....................................................... 1,196
Salaries Payable ................................................ 1,196

6–13A. (a) Full-time employee-hours ............................................................ 8,270

Part-time employee-hours ........................................................... 1,950
Total ....................................................................................... 10,220
Contribution rate .......................................................................... × 0.0165
July withholding ........................................................................... $168.63
(b) Workers Compensation Insurance Collected, Workers Compensation
Insurance Withheld, or Workers Compensation Insurance Payable*
(c) Workers Compensation Insurance Expense ........... 168.63
Workers Compensation Insurance
Payable .............................................................. 168.63
Full-time employee-hours ........................................ 8,270
Part-time employee-hours ....................................... 1,950
Total ................................................................... 10,220
Contribution rate ...................................................... ×0.0165
Employer’s liability for July ...................................... $168.63
(d) *Workers Compensation Insurance Collected......... 168.63
Workers Compensation Insurance Payable .......... 168.63
Cash ............................................................... 337.26

*A company could also use the same account for both the employees’ and employer’s contribution.

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 6–10
6–14A. Vacation Benefits Expense .................................. 740.00
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Vacation Benefits Payable ............................. 740.00

6–15A.
1.
Taxes to Be Withheld Employer Taxes:
from Employees’ Portion of Employees’
Earnings Under Earnings Taxable Under
FICA FICA
Employee OASDI HI SUTA OASDI HI FUTA SUTA
1. Weiser, Robert A. ......... $ 0.00 $25.96 ....... $ ………. $ 1,790.00 ............ ............
2. Stankard, Laurie C. ...... 18.29 4.28 ....... 295.00 295.00 ............ ............
3. Grow, Joan L. ............... 14.88 3.48 $1.20 240.00 240.00 $240.00 $240.00
4. Rowe, Paul C. ............. 14.57 3.41 ....... 235.00 235.00 ............ ............
5. McNamara, Joyce M. .. 12.09 2.83 0.98 195.00 195.00 ............ 195.00
6. O’Connor, Roger T. ..... 17.98 26.25 ....... 290.00 1,810.00 ............ ............
7. Carson, Ronald B. ........ 17.36 4.06 ....... 280.00 280.00 ............ ............
8. Kenny, Ginni C. ........... 10.85 2.54 0.88 175.00 175.00 175.00 175.00
9. Devery, Virginia S. ...... 36.58 8.56 ....... 590.00 590.00 ............ ............
10. Wilson, Joe W. ............ 12.71 2.97 1.03 205.00 205.00 205.00 205.00
Total employee taxes $155.31 $84.34 $4.09
(a) (b) (c)

2.
Total taxable earnings ......................................................... $2,505.00 $5,815.00 $620.00 $815.00
× Applicable tax rate ........................................................... 0.062 0.0145 0.006 0.018
Totals ............................................................................ $ 155.31 $ 84.32 $ 3.72 $ 14.67

Payroll Accounting
Total payroll taxes ............................................................... $258.02
Chapter 6 6–11

6–16A. (a)
BROOKINS COMPANY JOURNAL
Page 19
20--
Apr. 1 Union Dues Payable ............................... 28 100.00
Cash .................................................. 11 100.00
15 Wages and Salaries ................................ 51 6,105.00
FICA Taxes Payable—OASDI ........... 20 378.51
FICA Taxes Payable—HI .................. 21 88.52
Employees FIT Payable .................... 25 565.00
Employees SIT Payable .................... 26 107.32
Union Dues Payable .......................... 28 50.00
Cash .................................................. 11 4,915.65
15 Payroll Taxes .......................................... 55 644.08
FICA Taxes Payable—OASDI ........... 20 378.51
FICA Taxes Payable—HI .................. 21 88.52
FUTA Taxes Payable ........................ 22 36.63
SUTA Taxes Payable ........................ 23 140.42
15 Employees SIT Payable.......................... 26 546.92
Cash .................................................. 11 546.92
15 FICA Taxes Payable—OASDI ................ 20 1,068.88
FICA Taxes Payable—HI ........................ 21 249.98
Employees FIT Payable .......................... 25 1,124.00
Cash .................................................. 11 2,442.86
29 Wages and Salaries ................................ 51 5,850.00
FICA Taxes Payable—OASDI ........... 20 362.70
FICA Taxes Payable—HI .................. 21 84.83
Employees FIT Payable .................... 25 509.00
Employees SIT Payable .................... 26 128.90
Union Dues Payable .......................... 28 55.00
Cash .................................................. 11 4,709.57
29 Payroll Taxes .......................................... 55 617.18
FICA Taxes Payable—OASDI ........... 20 362.70
FICA Taxes Payable—HI .................. 21 84.83
FUTA Taxes Payable ........................ 22 35.10
SUTA Taxes Payable ........................ 23 134.55
29 SUTA Taxes Payable ............................. 23 571.78
Cash .................................................. 11 571.78

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6–12 Payroll Accounting

6–16A. (Continued)
JOURNAL Page 20
20--
May 2 Union Dues Payable .............................. 28 105.00
Cash ................................................. 11 105.00
13 Wages and Salaries ............................... 51 5,810.00
FICA Taxes Payable—OASDI .......... 20 360.22
FICA Taxes Payable—HI .................. 21 84.25
Employees FIT Payable .................... 25 507.00
Employees SIT Payable.................... 26 125.05
Union Dues Payable ......................... 28 55.00
Cash ................................................. 11 4,678.48
13 Payroll Taxes ......................................... 55 612.96
FICA Taxes Payable—OASDI .......... 20 360.22
FICA Taxes Payable—HI .................. 21 84.25
FUTA Taxes Payable ........................ 22 34.86
SUTA Taxes Payable........................ 23 133.63
16 FICA Taxes Payable—OASDI ................ 20 1,482.42
FICA Taxes Payable—HI ....................... 21 346.70
Employees FIT Payable ......................... 25 1,074.00
Cash ................................................. 11 2,903.12
31 Wages and Salaries ............................... 51 6,060.00
FICA Taxes Payable—OASDI .......... 20 375.72
FICA Taxes Payable—HI .................. 21 87.87
Employees FIT Payable .................... 25 533.00
Employees SIT Payable.................... 26 119.00
Union Dues Payable ......................... 28 50.00
Cash ................................................. 11 4,894.41
31 Payroll Taxes ......................................... 55 639.33
FICA Taxes Payable—OASDI .......... 20 375.72
FICA Taxes Payable—HI .................. 21 87.87
FUTA Taxes Payable ........................ 22 36.36
SUTA Taxes Payable........................ 23 139.38

June 3 Union Dues Payable .............................. 28 105.00

Cash ................................................. 11 105.00

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Chapter 6 6–13

6–16A. (Continued)
JOURNAL Page 21
20--
June 15 Wages and Salaries ................................ 51 6,380.00
FICA Taxes Payable—OASDI ........... 20 395.56
FICA Taxes Payable—HI .................. 21 92.51
Employees FIT Payable .................... 25 549.00
Employees SIT Payable .................... 26 128.70
Union Dues Payable .......................... 28 50.00
Cash .................................................. 11 5,164.23
15 Payroll Taxes .......................................... 55 633.07
FICA Taxes Payable—OASDI ........... 20 395.56
FICA Taxes Payable—HI .................. 21 92.51
FUTA Taxes Payable ........................ 22 30.00
SUTA Taxes Payable ........................ 23 115.00
15 FICA Taxes Payable—OASDI ................ 20 1,471.88
FICA Taxes Payable—HI ........................ 21 344.24
Employees FIT Payable .......................... 25 1,040.00
Cash .................................................. 11 2,856.12
30 Wages and Salaries ................................ 51 6,250.00
FICA Taxes Payable—OASDI ........... 20 387.50
FICA Taxes Payable—HI .................. 21 90.63
Employees FIT Payable .................... 25 538.00
Employees SIT Payable .................... 26 127.60
Union Dues Payable .......................... 28 50.00
Cash .................................................. 11 5,056.27
30 Payroll Taxes .......................................... 55 616.46
FICA Taxes Payable—OASDI ........... 20 387.50
FICA Taxes Payable—HI .................. 21 90.63
FUTA Taxes Payable ........................ 22 28.62
SUTA Taxes Payable ........................ 23 109.71

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6–14 Payroll Accounting

6–16A. (Continued)
GENERAL LEDGER
(b)
CASH 11
Balance
Date Item P.R. Dr. Cr. Dr. Cr.
20--
Apr. 1 Balance .......... 9 .............. ................ 57,673.56 ...............
1 ....................... J19 .............. 100.00 57,573.56 ...............
15 ....................... J19 .............. 4,915.65 52,657.91 ...............
15 ....................... J19 .............. 546.92 52,110.99 ...............
15 ....................... J19 .............. 2,442.86 49,668.13 ...............
29 ....................... J19 .............. 4,709.57 44,958.56 ...............
29 ....................... J19 .............. 571.78 44,386.78 ...............
May 2 ....................... J20 .............. 105.00 44,281.78 ...............
13 ....................... J20 .............. 4,678.48 39,603.30 ...............
16 ....................... J20 .............. 2,903.12 36,700.18 ...............
31 ....................... J20 .............. 4,894.41 31,805.77 ...............
June 3 ....................... J20 .............. 105.00 31,700.77 ...............
15 ....................... J21 .............. 5,164.23 26,536.54 ...............
15 ....................... J21 .............. 2,856.12 23,680.42 ...............
30 ....................... J21 .............. 5,056.27 18,624.15 ...............

FICA TAXES PAYABLE—OASDI 20

Balance
Date Item P.R. Dr. Cr. Dr. Cr.
20--
Apr. 1 Balance ......... 9 .............. ................ ............... 1,068.88
15 ....................... J19 .............. 378.51 ............... 1,447.39
15 ....................... J19 .............. 378.51 ............... 1,825.90
15 ....................... J19 1,068.88 ............... .............. 757.02
29 ....................... J19 .............. 362.70 ............... 1,119.72
29 ....................... J19 .............. 362.70 ............... 1,482.42
May 13 ....................... J20 .............. 360.22 ............... 1,842.64
13 ....................... J20 .............. 360.22 ............... 2,202.86
16 ....................... J20 1,482.42 ............... .............. 720.44
31 ....................... J20 .............. 375.72 ............... 1,096.16
31 ....................... J20 .............. 375.72 ............... 1,471.88
June 15 ....................... J21 .............. 395.56 ............... 1,867.44
15 ....................... J21 .............. 395.56 ............... 2,263.00
15 ....................... J21 1,471.88 ............... .............. 791.12
30 ....................... J21 .............. 387.50 ............... 1,178.62
30 ....................... J21 .............. 387.50 ............... 1,566.12

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Chapter 6 6–15

6–16A. (Continued)
FICA TAXES PAYABLE—HI 21
Balance
Date Item P.R. Dr. Cr. Dr. Cr.
20--
Apr. 1 Balance ......... 9 ................. ................ ................ 249.98
15 ....................... J19 ................. 88.52 ................ 338.50
15 ....................... J19 ................. 88.52 ................ 427.02
15 ....................... J19 249.98 ................ ................ 177.04
29 ....................... J19 ................. 84.83 ................ 261.87
29 ....................... J19 ................. 84.83 ................ 346.70
May 13 ....................... J20 ................. 84.25 ................ 430.95
13 ....................... J20 ................. 84.25 ................ 515.20
16 ....................... J20 346.70 ................ ................ 168.50
31 ....................... J20 ................. 87.87 ................ 256.37
31 ....................... J20 ................. 87.87 ................ 344.24
June 15 ....................... J21 ................. 92.51 ................ 436.75
15 ....................... J21 ................. 92.51 ................ 529.26
15 ....................... J21 344.24 ................ ................ 185.02
30 ....................... J21 ................. 90.63 ................ 275.65
30 ....................... J21 ................. 90.63 ................ 366.28

FUTA TAXES PAYABLE 22

Balance
Date Item P.R. Dr. Cr. Dr. Cr.
20--
Apr. 1 Balance ......... 9 ................. ................ ................ 149.16
15 ....................... J19 ................. 36.63 ................ 185.79
29 ....................... J19 ................. 35.10 ................ 220.89
May 13 ....................... J20 ................. 34.86 ................ 255.75
31 ....................... J20 ................. 36.36 ................ 292.11
June 15 ....................... J21 ................. 30.00 ................ 322.11
30 ....................... J21 ................. 28.62 ................ 350.73

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6–16 Payroll Accounting

6–16A. (Continued)
SUTA TAXES PAYABLE 23
Balance
Date Item P.R. Dr. Cr. Dr. Cr.
20--
Apr. 1 Balance ......... 9 ................ ................ ................. 571.78
15 ....................... J19 ................ 140.42 ................. 712.20
29 ....................... J19 ................ 134.55 ................. 846.75
29 ....................... J19 571.78 ................ ................. 274.97
May 13 ....................... J20 ................ 133.63 ................. 408.60
31 ....................... J20 ................ 139.38 ................. 547.98
June 15 ....................... J21 ................ 115.00 ................. 662.98
30 ....................... J21 ................ 109.71 ................. 772.69

EMPLOYEES FIT PAYABLE 25

Balance
Date Item P.R. Dr. Cr. Dr. Cr.
20--
Apr. 1 Balance ......... 9 ................ ................ ................. 1,124.00
15 ....................... J19 ................ 565.00 ................. 1,689.00
15 ....................... J19 1,124.00 ................ ................. 565.00
29 ....................... J19 ................ 509.00 ................. 1,074.00
May 13 ....................... J20 ................ 507.00 ................. 1,581.00
16 ....................... J20 1,074.00 ................ ................. 507.00
31 ....................... J20 ................ 533.00 ................. 1,040.00
June 15 ....................... J21 ................ 549.00 ................. 1,589.00
15 ....................... J21 1,040.00 ................ ................. 549.00
30 ....................... J21 ................ 538.00 ................. 1,087.00

EMPLOYEES SIT PAYABLE 26

Balance
Date Item P.R. Dr. Cr. Dr. Cr.
20--
Apr. 1 Balance ......... 9 ................ ................ ................. 546.92
15 ....................... J19 ................ 107.32 ................. 654.24
15 ....................... J19 546.92 ................ ................. 107.32
29 ....................... J19 ................ 128.90 ................. 236.22
May 13 ....................... J20 ................ 125.05 ................. 361.27
31 ....................... J20 ................ 119.00 ................. 480.27
June 15 ....................... J21 ................ 128.70 ................. 608.97
30 ....................... J21 ................ 127.60 ................. 736.57

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Chapter 6 6–17

6–16A. (Continued)
UNION DUES PAYABLE 28
Balance
Date Item P.R. Dr. Cr. Dr. Cr.
20--
Apr. 1 Balance ......... 9 ................. ................ ................ 100.00
1 ....................... J19 100.00 ................ — —
15 ....................... J19 ................. 50.00 ................ 50.00
29 ....................... J19 ................. 55.00 ................ 105.00
May 2 ....................... J20 105.00 ................ — —
13 ....................... J20 ................. 55.00 ................ 55.00
31 ....................... J20 ................. 50.00 ................ 105.00
June 3 ....................... J20 105.00 ................ — —
15 ....................... J21 ................. 50.00 ................ 50.00
30 ....................... J21 ................. 50.00 ................ 100.00

WAGES AND SALARIES 51

Balance
Date Item P.R. Dr. Cr. Dr. Cr.
20--
Apr. 1 Balance ......... 9 ................. ................ 71,360.00 ..............
15 ....................... J19 6,105.00 ................ 77,465.00 ..............
29 ....................... J19 5,850.00 ................ 83,315.00 ..............
May 13 ....................... J20 5,810.00 ................ 89,125.00 ..............
31 ....................... J20 6,060.00 ................ 95,185.00 ..............
June 15 ....................... J21 6,380.00 ................ 101,565.00 ..............
30 ....................... J21 6,250.00 ................ 107,815.00 ..............

PAYROLL TAXES 55
Balance
Date Item P.R. Dr. Cr. Dr. Cr.
20--
Apr. 1 Balance ......... 9 ................. ................ 6,846.74 ..............
15 ....................... J19 644.08 ................ 7,490.82 ..............
29 ....................... J19 617.18 ................ 8,108.00 ..............
May 13 ....................... J20 612.96 ................ 8,720.96 ..............
31 ....................... J20 639.33 ................ 9,360.29 ..............
June 15 ....................... J21 633.07 ................ 9,993.36 ..............
30 ....................... J21 616.46 ................ 10,609.82 ..............

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6–18 Payroll Accounting

6–16A. (Concluded)
(c) Questions
1. FICA Taxes Payable—OASDI ................................................... $1,566.12
FICA Taxes Payable—HI .......................................................... 366.28
Employees FIT Payable ............................................................ 1,087.00
Total liability ......................................................................... $3,019.40
2. $736.57
3. $0
4. $772.69
5. $100
6. $107,815.00
7. $10,609.82
8. Vacation Benefits Expense ............................... 15,000.00
Vacation Benefits Payable ........................ 15,000.00

Solutions—Problem Set B

6–1B. Take-home pay .................................................... $499.00

Standard deduction $ 6,200
Personal exemptions ($3,950 × 2) = 7,900
$14,100 ÷ 52 = 271.15
Federal tax levy .................................................... $227.85
6–2B. (a) Disposable earnings [exclude health insurance,
credit union, United Fund ($895 – $96.00 – $55.49
– $12.98 – $27.75 – $6.71)] ................................ $696.07
(b) Pay subject to garnishment ($696.07 × 0.25) ....... $174.02
6–3B. (a) Wages .................................................................. 16,900.00
FICA Taxes Payable—OASDI ........................ 1,047.80
FICA Taxes Payable—HI ................................ 245.05
Employees FIT Payable .................................. 1,698.00
Cash ............................................................... 13,909.15
Payroll Taxes ....................................................... 1,292.85
FICA Taxes Payable—OASDI ........................ 1,047.80
FICA Taxes Payable—HI ................................ 245.05
(b) FICA Taxes Payable—OASDI.............................. 2,095.60
FICA Taxes Payable—HI ..................................... 490.10
Employees FIT Payable ....................................... 1,698.00
Cash ............................................................... 4,283.70

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Chapter 6 6–19

6–4B. Wages.................................................................. 7,780.00

FICA Taxes Payable—OASDI ........................ 482.36
FICA Taxes Payable—HI ............................... 112.81
Employees FIT Payable ................................. 998.00
Cash ............................................................... 6,186.83
Payroll Taxes ....................................................... 976.39
FICA Taxes Payable—OASDI ........................ 482.36
FICA Taxes Payable—HI ............................... 112.81
FUTA Taxes Payable ..................................... 46.68
SUTA Taxes Payable ..................................... 334.54
6–5B. (a) Wages.................................................................. 53,900.00
FICA Taxes Payable—OASDI ........................ 3,124.80
FICA Taxes Payable—HI ............................... 781.55
Employees FIT Payable ................................. 6,995.00
Employees SIT Payable ................................. 1,010.00
Cash ............................................................... 41,988.65
Payroll Taxes ....................................................... 4,176.45
FICA Taxes Payable—OASDI ........................ 3,124.80
FICA Taxes Payable—HI ............................... 781.55
FUTA Taxes Payable ..................................... 43.80
SUTA Taxes Payable ..................................... 226.30
(b) Wages.................................................................. 53,900.00
FICA Taxes Payable—OASDI ........................ 3,124.80
FICA Taxes Payable—HI ............................... 781.55
Employees Disability Contributions Payable .. 241.00
Employees FIT Payable ................................. 6,995.00
Employees SIT Payable ................................. 1,010.00
Cash ............................................................... 41,747.65

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6–20 Payroll Accounting

6–6B. For Period Ending August 15, 20--

ADAMS, INC.
Supplementary Payroll Sheet
Net
Amount Bills Coins
Employee Paid $20 $10 $5 $1 50¢ 25¢ 10¢ 5¢ 1¢
Ben Dowd $ 639.57 31 1 1 4 1 1 2
Erin Martin 248.95 12 1 3 1 1 2
Dot Ruiz 491.95 24 1 1 1 1 2
Randi Heavner 832.14 41 1 2 1 4
Rex Sundry 710.15 35 1 1 1
Hal Roach 709.13 35 1 4 1 3
Mandy Arnold 519.13 25 1 1 4 1 3
Faye Montgomery 227.24 11 1 2 2 4
Max Held 473.18 23 1 3 1 1 3
Pedro Rodries 590.90 29 1 1 1 1 1
Total $ 5,442.34 266 7 5 23 4 3 12 4 19

6–7B. Wages .................................................................. 2,400.00

FICA Taxes Payable—OASDI ........................ 148.80
FICA Taxes Payable—HI ................................ 34.80
Employees FIT Payable .................................. 532.00
Employees SIT Payable.................................. 117.04
Retirement Plan Contributions Payable .......... 72.00
Garnishment Payable ..................................... 125.00
Health Insurance Premiums Payable .............. 110.00
Cash ............................................................... 1,260.36
Payroll Taxes ....................................................... 183.60
FICA Taxes Payable—OASDI ........................ 148.80
FICA Taxes Payable—HI ................................ 34.80
6–8B. Wages .................................................................. 15,600.00
FICA Taxes Payable—OASDI ........................ 967.20
FICA Taxes Payable—HI ................................ 226.20
Employees FIT Payable .................................. 424.00
SUTA Taxes Payable...................................... 54.00
Cash ............................................................... 13,928.60
Payroll Taxes ....................................................... 1,679.40
FICA Taxes Payable—OASDI ........................ 967.20
FICA Taxes Payable—HI ................................ 226.20
FUTA Taxes Payable ...................................... 64.80
SUTA Taxes Payable...................................... 421.20

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Chapter 6 6–21

6–9B. Wages ..................................................................... 2,910.00

FICA Taxes Payable—OASDI ........................... 180.42
FICA Taxes Payable—HI ................................... 42.20
Employees FIT Payable ..................................... 491.00
Employees SIT Payable .................................... 49.10
Group Insurance Premiums Collected ............... 87.10
Cash ................................................................... 2,060.18
Payroll Taxes ........................................................... 349.21
FICA Taxes Payable—OASDI ........................... 180.42
FICA Taxes Payable—HI ................................... 42.20
FUTA Taxes Payable ......................................... 17.46
SUTA Taxes Payable......................................... 109.13

6–10B. FUTA Taxes Payable .............................................. 619.24

Cash ................................................................... 619.24

6–11B. Wages ..................................................................... 17,922.00

Wages Payable .................................................. 17,922.00

6–12B. (a) $866.80

(b) 39.40
(c) $906.20
(d) Salary Expense ................................................... 906.20
Salaries Payable ............................................ 906.20
6–13B. (a) Full-time employee-hours ....................................................... 26,110
Part-time employee-hours....................................................... 3,490
Total .................................................................................. 29,600
Contribution rate ..................................................................... × 0.0165
July withholding ...................................................................... $488.40
(b) Workers Compensation Insurance Collected, Workers Compensation
Insurance Withheld, or Workers Compensation Insurance Payable*
(c) Workers Compensation Insurance Expense ........ 488.40
Workers Compensation Insurance
Payable .......................................................... 488.40
Full-time employee-hours .................................... 26,110
Part-time employee-hours.................................... 3,490
Total ............................................................... 29,600
Contribution rate .................................................. × 0.0165
Employer’s liability for July ................................... $488.40
(d) *Workers Compensation Insurance Collected ........ 488.40
Workers Compensation Insurance Payable.......... 488.40
Cash ............................................................... 976.80

*A company could also use the same account for both the employees’ and employer’s contribution.

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 6–22
6–14B. Vacation Benefits Expense .................................. 620.00
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Vacation Benefits Payable ............................. 620.00

6–15B.
1.
Taxes to Be Withheld Employer Taxes:
from Employees’ Portion of Employees’
Earnings Under Earnings Taxable Under
FICA FICA
Employee OASDI HI SUTA OASDI HI FUTA SUTA
1. Watson, Ruth T. .......... $ 0.00 $ 27.41 ....... $ ………. $1,890.00 ............ ............
2. Kinder, Ralph A. .......... 25.42 5.95 ....... 410.00 410.00 ............ ............
3. Sanchez, Robert T. ..... 24.49 5.73 $1.98 395.00 395.00 $395.00 $395.00
4. Carey, Mary C. ............ 18.29 4.28 ....... 295.00 295.00 ............ ............
5. Cox, Mason M. ............ 26.35 6.16 2.13 425.00 425.00 425.00 425.00
6. Kenni, Jack T. ............. 12.40 26.83 ....... 200.00 1,850.00 ............ ............
7. Britmayer, Tim A. ........ 30.38 7.11 ....... 490.00 490.00 ............ ............
8. Candi, Mark B. ............ 20.15 4.71 1.63 325.00 325.00 175.00 325.00
9. Boxer, Barbara C. ....... 71.30 16.68 ....... 1,150.00 1,150.00 ............ ............
10. McBride, James W. ..... 12.09 2.83 0.98 195.00 195.00 195.00 195.00
Total employee taxes $240.87 $107.69 $6.72
(a) (b) (c)

2.
Total taxable earnings ......................................................... $3,885.00 $7,425.00 $1,190.00 $1,340.00
× Applicable tax rate ........................................................... 0.062 0.0145 0.006 0.028
Totals ............................................................................ $ 240.87 $ 107.66 $ 7.14 $ 37.52

Payroll Accounting
Total payroll taxes ............................................................... $393.19
Chapter 6 6–23

6–16B. (a)
BROOKINS COMPANY JOURNAL
Page 19
20--
Apr. 1 Union Dues Payable ................................. 28 100.00
Cash .................................................... 11 100.00
15 Wages and Salaries .................................. 51 8,310.00
FICA Taxes Payable—OASDI ............. 20 515.22
FICA Taxes Payable—HI .................... 21 120.50
Employees FIT Payable ...................... 25 890.00
Employees SIT Payable ...................... 26 166.20
Union Dues Payable ............................ 28 140.00
Cash .................................................... 11 6,478.08
15 Payroll Taxes ............................................ 55 876.71
FICA Taxes Payable—OASDI ............. 20 515.22
FICA Taxes Payable—HI .................... 21 120.50
FUTA Taxes Payable .......................... 22 49.86
SUTA Taxes Payable .......................... 23 191.13
15 Employees SIT Payable............................ 26 546.92
Cash .................................................... 11 546.92
15 FICA Taxes Payable—OASDI .................. 20 1,068.88
FICA Taxes Payable—HI .......................... 21 249.98
Employees FIT Payable ............................ 25 1,124.00
Cash .................................................... 11 2,442.86
29 Wages and Salaries .................................. 51 7,975.00
FICA Taxes Payable—OASDI ............. 20 494.45
FICA Taxes Payable—HI .................... 21 115.64
Employees FIT Payable ...................... 25 815.00
Employees SIT Payable ...................... 26 151.50
Union Dues Payable ............................ 28 135.00
Cash .................................................... 11 6,263.41
29 Payroll Taxes ............................................ 55 841.37
FICA Taxes Payable—OASDI ............. 20 494.45
FICA Taxes Payable—HI .................... 21 115.64
FUTA Taxes Payable .......................... 22 47.85
SUTA Taxes Payable .......................... 23 183.43
29 SUTA Taxes Payable ............................... 23 571.78
Cash .................................................... 11 571.78

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6–24 Payroll Accounting

6–16B. (Continued)
JOURNAL Page 20
20--
May 2 Union Dues Payable ................................. 28 275.00
Cash .................................................... 11 275.00
13 Wages and Salaries .................................. 51 8,190.00
FICA Taxes Payable—OASDI ............. 20 507.78
FICA Taxes Payable—HI ..................... 21 118.76
Employees FIT Payable ....................... 25 875.00
Employees SIT Payable....................... 26 160.05
Union Dues Payable ............................ 28 135.00
Cash .................................................... 11 6,393.41
13 Payroll Taxes ............................................ 55 864.05
FICA Taxes Payable—OASDI ............. 20 507.78
FICA Taxes Payable—HI ..................... 21 118.76
FUTA Taxes Payable ........................... 22 49.14
SUTA Taxes Payable........................... 23 188.37
16 FICA Taxes Payable—OASDI ................... 20 2,019.34
FICA Taxes Payable—HI .......................... 21 472.28
Employees FIT Payable ............................ 25 1,705.00
Cash ................................................... 11 4,196.62
31 Wages and Salaries .................................. 51 8,755.00
FICA Taxes Payable—OASDI ............. 20 542.81
FICA Taxes Payable—HI ..................... 21 126.95
Employees FIT Payable ....................... 25 971.00
Employees SIT Payable....................... 26 174.05
Union Dues Payable ............................ 28 140.00
Cash .................................................... 11 6,800.19
31 Payroll Taxes ............................................ 55 923.66
FICA Taxes Payable—OASDI ............. 20 542.81
FICA Taxes Payable—HI ..................... 21 126.95
FUTA Taxes Payable ........................... 22 52.53
SUTA Taxes Payable........................... 23 201.37

June 3 Union Dues Payable ................................. 28 275.00

Cash .................................................... 11 275.00

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Chapter 6 6–25

6–16B. (Continued)
JOURNAL Page 21
20--
June 15 Wages and Salaries .................................. 51 9,110.00
FICA Taxes Payable—OASDI ............. 20 564.82
FICA Taxes Payable—HI .................... 21 132.10
Employees FIT Payable ...................... 25 1,029.00
Employees SIT Payable ...................... 26 187.15
Union Dues Payable ............................ 28 145.00
Cash .................................................... 11 7,051.93
15 Payroll Taxes ............................................ 55 819.01
FICA Taxes Payable—OASDI ............. 20 564.82
FICA Taxes Payable—HI .................... 21 132.10
FUTA Taxes Payable .......................... 22 25.26
SUTA Taxes Payable .......................... 23 96.83
15 FICA Taxes Payable—OASDI .................. 20 2,101.18
FICA Taxes Payable—HI .......................... 21 491.42
Employees FIT Payable ............................ 25 1,846.00
Cash .................................................... 11 4,438.60
30 Wages and Salaries .................................. 51 8,960.00
FICA Taxes Payable—OASDI ............. 20 555.52
FICA Taxes Payable—HI .................... 21 129.92
Employees FIT Payable ...................... 25 988.00
Employees SIT Payable ...................... 26 183.95
Union Dues Payable ............................ 28 145.00
Cash .................................................... 11 6,957.61
30 Payroll Taxes ............................................ 55 751.56
FICA Taxes Payable—OASDI ............. 20 555.52
FICA Taxes Payable—HI .................... 21 129.92
FUTA Taxes Payable .......................... 22 13.68
SUTA Taxes Payable .......................... 23 52.44

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6–26 Payroll Accounting

6–16B. (Continued)
GENERAL LEDGER
(b)
CASH 11
Balance
Date Item P.R. Dr. Cr. Dr. Cr.
20--
Apr. 1 Balance .......... 9 .............. ............. 57,673.56 ...............
1 ....................... J19 .............. 100.00 57,573.56 ...............
15 ....................... J19 .............. 6,478.08 51,095.48 ...............
15 ....................... J19 .............. 546.92 50,548.56 ...............
15 ....................... J19 .............. 2,442.86 48,105.70 ...............
29 ....................... J19 .............. 6,263.41 41,842.29 ...............
29 ....................... J19 .............. 571.78 41,270.51 ...............
May 2 ....................... J20 .............. 275.00 40,995.51 ...............
13 ....................... J20 .............. 6,393.41 34,602.10 ...............
16 ....................... J20 .............. 4,196.62 30,405.48 ...............
31 ....................... J20 .............. 6,800.19 23,605.29 ...............
June 3 ....................... J20 .............. 275.00 23,330.29 ...............
15 ....................... J21 .............. 7,051.93 16,278.36 ...............
15 ....................... J21 .............. 4,438.60 11,839.76 ...............
30 ....................... J21 .............. 6,957.61 4,882.15 ...............

FICA TAXES PAYABLE—OASDI 20

Balance
Date Item P.R. Dr. Cr. Dr. Cr.
20--
Apr. 1 Balance ......... 9 .............. ............. ................ 1,068.88
15 ....................... J19 .............. 515.22 ................ 1,584.10
15 ....................... J19 .............. 515.22 ................ 2,099.32
15 ....................... J19 1,068.88 ............. ............... 1,030.44
29 ....................... J19 .............. 494.45 ................ 1,524.89
29 ....................... J19 .............. 494.45 ................ 2,019.34
May 13 ....................... J20 .............. 507.78 ................ 2,527.12
13 ....................... J20 .............. 507.78 ................ 3,034.90
16 ....................... J20 2,019.34 ............. ............... 1,015.56
31 ....................... J20 .............. 542.81 ................ 1,558.37
31 ....................... J20 .............. 542.81 ................ 2,101.18
June 15 ....................... J21 .............. 564.82 ................ 2,666.00
15 ....................... J21 .............. 564.82 ................ 3,230.82
15 ....................... J21 2,101.18 ............. ............... 1,129.64
30 ....................... J21 .............. 555.52 ................ 1,685.16
30 ....................... J21 .............. 555.52 ................ 2,240.68

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Chapter 6 6–27

6–16B. (Continued)
FICA TAXES PAYABLE—HI 21
Balance
Date Item P.R. Dr. Cr. Dr. Cr.
20--
Apr. 1 Balance ......... 9 ................. ................ ................ 249.98
15 ....................... J19 ................. 120.50 ................ 370.48
15 ....................... J19 ................. 120.50 ................ 490.98
15 ....................... J19 249.98 ................ ................ 241.00
29 ....................... J19 ................. 115.64 ................ 356.64
29 ....................... J19 ................. 115.64 ................ 472.28
May 13 ....................... J20 ................. 118.76 ................ 591.04
13 ....................... J20 ................. 118.76 ................ 709.80
16 ....................... J20 472.28 ................ ................ 237.52
31 ....................... J20 ................. 126.95 ................ 364.47
31 ....................... J20 ................. 126.95 ................ 491.42
June 15 ....................... J21 ................. 132.10 ................ 623.52
15 ....................... J21 ................. 132.10 ................ 755.62
15 ....................... J21 491.42 ................ ................ 264.20
30 ....................... J21 ................. 129.92 ................ 394.12
30 ....................... J21 ................. 129.92 ................ 524.04

FUTA TAXES PAYABLE 22

Balance
Date Item P.R. Dr. Cr. Dr. Cr.
20--
Apr. 1 Balance ......... 9 ................. ................ ................ 149.16
15 ....................... J19 ................. 49.86 ................ 199.02
29 ....................... J19 ................. 47.85 ................ 246.87
May 13 ....................... J20 ................. 49.14 ................ 296.01
31 ....................... J20 ................. 52.53 ................ 348.54
June 15 ....................... J21 ................. 25.26 ................ 373.80
30 ....................... J21 ................. 13.68 ................ 387.48

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6–28 Payroll Accounting

6–16B. (Continued)
SUTA TAXES PAYABLE 23
Balance
Date Item P.R. Dr. Cr. Dr. Cr.
20--
Apr. 1 Balance ......... 9 ................ ................ ................. 571.78
15 ....................... J19 ................ 191.13 ................. 762.91
29 ....................... J19 ................ 183.43 ................. 946.34
29 ....................... J19 571.78 ................ ................. 374.56
May 13 ....................... J20 ................ 188.37 ................. 562.93
31 ....................... J20 ................ 201.37 ................. 764.30
June 15 ....................... J21 ................ 96.83 ................. 861.13
30 ....................... J21 ................ 52.44 ................. 913.57

EMPLOYEES FIT PAYABLE 25

Balance
Date Item P.R. Dr. Cr. Dr. Cr.
20--
Apr. 1 Balance ......... 9 ................ ................ ................. 1,124.00
15 ....................... J19 ................ 890.00 ................. 2,014.00
15 ....................... J19 1,124.00 ................ ................. 890.00
29 ....................... J19 ................ 815.00 ................. 1,705.00
May 13 ....................... J20 ................ 875.00 ................. 2,580.00
16 ....................... J20 1,705.00 ................ ................. 875.00
31 ....................... J20 ................ 971.00 ................. 1,846.00
June 15 ....................... J21 ................ 1,029.00 ................. 2,875.00
15 ....................... J21 1,846.00 ................ ................. 1,029.00
30 ....................... J21 ................ 988.00 ................. 2,017.00

EMPLOYEES SIT PAYABLE 26

Balance
Date Item P.R. Dr. Cr. Dr. Cr.
20--
Apr. 1 Balance ......... 9 ................ ................ ................. 546.92
15 ....................... J19 ................ 166.20 ................. 713.12
15 ....................... J19 546.92 ................ ................. 166.20
29 ....................... J19 ................ 151.50 ................. 317.70
May 13 ....................... J20 ................ 160.05 ................. 477.75
31 ....................... J20 ................ 174.05 ................. 651.80
June 15 ....................... J21 ................ 187.15 ................. 838.95
30 ....................... J21 ................ 183.95 ................. 1,022.90

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 6 6–29

6–16B. (Continued)
UNION DUES PAYABLE 28
Balance
Date Item P.R. Dr. Cr. Dr. Cr.
20--
Apr. 1 Balance ......... 9 ................. ................ ................ 100.00
1 ....................... J19 100.00 ................ — —
15 ....................... J19 ................. 140.00 ................ 140.00
29 ....................... J19 ................. 135.00 ................ 275.00
May 2 ....................... J20 275.00 ................ — —
13 ....................... J20 ................. 135.00 ................ 135.00
31 ....................... J20 ................. 140.00 ................ 275.00
June 3 ....................... J20 275.00 ................ — —
15 ....................... J21 ................. 145.00 ................ 145.00
30 ....................... J21 ................. 145.00 ................ 290.00

WAGES AND SALARIES 51

Balance
Date Item P.R. Dr. Cr. Dr. Cr.
20--
Apr. 1 Balance ......... 9 ................. ................ 71,360.00 ..............
15 ....................... J19 8,310.00 ................ 79,670.00 ..............
29 ....................... J19 7,975.00 ................ 87,645.00 ..............
May 13 ....................... J20 8,190.00 ................ 95,835.00 ..............
31 ....................... J20 8,755.00 ................ 104,590.00 ..............
June 15 ....................... J21 9,110.00 ................ 113,700.00 ..............
30 ....................... J21 8,960.00 ................ 122,660.00 ..............

PAYROLL TAXES 55
Balance
Date Item P.R. Dr. Cr. Dr. Cr.
20--
Apr. 1 Balance ......... 9 ................. ................ 6,846.74 ..............
15 ....................... J19 876.71 ................ 7,723.45 ..............
29 ....................... J19 841.37 ................ 8,564.82 ..............
May 13 ....................... J20 864.05 ................ 9,428.87 ..............
31 ....................... J20 923.66 ................ 10,352.53 ..............
June 15 ....................... J21 819.01 ................ 11,171.54 ..............
30 ....................... J21 751.56 ................ 11,923.10 ..............

© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
6–30 Payroll Accounting

6–16B. (Concluded)
(c) Questions
1. FICA Taxes Payable—OASDI ................................................... $2,240.68
FICA Taxes Payable—HI .......................................................... 524.04
Employees FIT Payable ............................................................ 2,017.00
Total liability ......................................................................... $4,781.72
2. $1,022.90
3. $0
4. $913.57
5. $290.00
6. $122,660.00
7. $11,923.10
8. Vacation Benefits Expense .................................. 15,000.00
Vacation Benefits Payable ........................... 15,000.00

Continuing Payroll Problem A (p. 6–82)

See the completed payroll register on pages CPP–1 through CPP–3.

Continuing Payroll Problem B (p. 6–82)

See the completed payroll register on pages CPP–4 through CPP–6.

Case Problem (p. 6–83)

Case 6–1
The additional payroll cost percentage would be calculated as follows:
FICA tax—OASDI ................................ $24,000 × 0.062 = $1,488.00
FICA tax—HI ........................................ $24,000 × 0.0145 = 348.00
FUTA tax ................................................ $7,000 × 0.006 = 42.00
SUTA tax ............................................. $10,400 × 0.033 = 343.20
Workers’ compensation costs .............. $24,000 × $0.97/$100 = 232.80
Health insurance costs ......................... $ 75.15 × 12 months = 901.80
Vacation pay ........................ $24,000/52 weeks × 2 weeks = 923.08
Total additional cost ............................................................................ $4,278.88
$4,278.88
Additional payroll cost percentage = = 17.83%
$24,000.00

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