Payment and distribution of payroll similar to Self-Study Problem 1
The general ledger of Smokey Mountain Mfg., Inc., showed the following credit balances on January 15:
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FICA Tax Payable | 3,100.00 |
Employees Income Tax Payable | 1,937.50 |
FUTA Tax Payable | 193.75 |
State Unemployment Tax Payable | 775.00 |
Direct labor earnings amounted to $10,500 from January 16 to 31. Indirect labor was $5,700, and sales and administrative salaries for the same period amounted to $3,800. All wages are subject to FICA, FUTA, state unemployment taxes, and 10% income tax withholding.
Required:
1. Prepare the journal entries for the following:
a. Recording the payroll.
b. Paying the payroll.
c. Recording the employer’s payroll tax liability.
d. Distributing the payroll costs for January 16 to 31.
2. Prepare the journal entry to record the payment of the amounts due for the month for FICA and income tax withholdings.
3. Calculate the amount of total earnings for the period from January 1 to 15.