LESSON 13-1 Recording A Payroll
Dec 15, 2015
LESSON 13-1
Recording A Payroll
PAYROLL REGISTERpage 369
Until payroll is recorded in the journal and then posted to the ledger accounts, the accounts are not up to date.
Salary Expense
Debited
Cash
Credited
Liabilities
Credited
ANALYZING PAYMENT OF A PAYROLL page 370
Total Earnings
Net Pay
Deductions
JOURNALIZING PAYMENT OF A PAYROLL page 371
December 15. Paid cash for payroll, $4,609.46. Check No. 335.
Audit Your Understanding
What account title is used journalize the total earnings column of the payroll register?
• Salary ExpenseWhat account title is used to
journalize the federal income tax column of the payroll register?
• Employee Income Tax Payable
Audit Your Understanding
What account title is used to journalize a Social Security tax column in the payroll register?
• Social Security Tax Payable
13-2 New Vocabulary
• Federal Unemployment Tax: A federal tax used for state and federal administrative expenses of the unemployment program
• State Unemployment Tax: A state tax used to pay benefits to unemployed workers
UNEMPLOYMENT TAXABLE EARNINGS
22
33
page 374
111. Enter accumulated earnings and total earnings for
each employee.2. Enter any unemployment taxable earnings.
3. Total the Unemployment Taxable Earnings column.
First:
• Determine if the tax base has been met.
FederalUnemployment
Tax=
FederalUnemployment
Tax Rate×
UnemploymentTaxableEarnings
StateUnemployment
Tax=
StateUnemployment
Tax Rate×
UnemploymentTaxableEarnings
UNEMPLOYMENT TAXESpage 375
$6.32=0.8%×$790.00
$42.66=5.4%×$790.00
2 Taxes
JOURNALIZING EMPLOYER
PAYROLL TAXESpage 376
December 15. Recorded employer payroll taxes expense, $485.92, for the semimonthly pay period ended December 15. Taxes owed are: social security tax, $354.11; Medicare tax, $82.83; federal unemployment tax, $6.32; state employment tax, $42.66. Memorandum No. 63.
(continued on next slide)
JOURNALIZING EMPLOYER
PAYROLL TAXESpage 376(continued from previous slide)
Audit Your Understanding
• What is the tax rate Hobby Shack must pay on employees for each of the following taxes: Social Security, Medicare, federal unemployment, and state unemployment?– Social Security: 6.2% of earnings up to a
maximum of $87,000 in each calendar year; – Medicare: 1.45% of total employee earnings; – Federal unemployment: 0.8% on the first
$7,000 earned by each employee; – State unemployment: 5.4% on the first $7,000
earned by each employee
Audit Your Understanding
What is the amount of each employee’s total earnings that are subject to federal and state unemployment taxes at Hobby Shack?
• Only the first $7,000 each employee earns
Work Together• Aplia.com
13-3 EMPLOYER ANNUAL REPORT TO EMPLOYEES OF
TAXES WITHHELDpage 378
EMPLOYER’S QUARTERLY FEDERAL
TAX RETURNpage 379
(continued on next slide)
11
22
1. Heading 2. Number of employees
EMPLOYER’S QUARTERLY FEDERAL TAX RETURN page 379
(continued on next slide)
3. Total quarterly earnings
4. Income tax withheld
5. Employee and employer social security and Medicare taxes 7. Total taxes
6. Social security plus Medicare taxes
44
55
33
66
77
EMPLOYER’S QUARTERLY FEDERAL TAX RETURN
page 379(continued from previous slide)
88 88 8899
8. Total taxes for each month
9. Total taxes
EMPLOYER ANNUAL REPORTING OF PAYROLL
TAXES page 381
Audit Your Understanding
When must employers provide a W–2 statement to their employees?
• By January 31What taxes are included in the
quarterly federal tax return filed by the employer?
• Federal income tax, Social Security tax, and Medicare tax
Work Together• Aplia.com
LESSON 13-4 New Vocabulary
• Lookback Period: The 12-month period that ends on June 30 of the prior year– (Helps to determine when payroll
taxes are due to the government.)
PAYING THE LIABILITY FOR EMPLOYEE INCOME TAX, SOCIAL SECURITY TAX,
AND MEDICARE TAX page 383
FORM 8109, FEDERAL DEPOSIT COUPONpage 384
JOURNALIZING PAYMENT OF LIABILITY FOR EMPLOYEE INCOME TAX, SOCIAL SECURITY TAX, AND MEDICARE TAX page 385
January 15. Paid cash for liability for employee income tax, $757.00; social security tax, $1,451.38; and Medicare tax, $339.42; total, $2,547.80. Check No. 347.
PAYING THE LIABILITY FOR FEDERAL UNEMPLOYMENT TAX page 386
JOURNALIZING PAYMENT OF LIABILITY FOR FEDERAL UNEMPLOYMENT TAX
11 22 33 44 55
page 387
January 31. Paid cash for federal unemployment tax liability for quarter ended December 31, $34.60. Check No. 367.
JOURNALIZING PAYMENT OF LIABILITY FOR STATE UNEMPLOYMENT TAX page 387
January 31. Paid cash for state unemployment tax liability for quarter ended December 31, $233.55. Check No. 368.
Work Together• Aplia.com
IQ Test (for Professionals)
• How do you put a giraffe into a refrigerator?
• Open the refrigerator door, put the giraffe in, and close the door.
• This question tests whether or not you do simple things in a complicated way.
IQ Test• How do you put an elephant
into a refrigerator?• Open the refrigerator door,
take the giraffe out, put the elephant in, and close the door.
• This question tests your prudence and practicality.
IQ Test• The Lion King is hosting an
animal conference. All animals except one attend. Which one does not attend?
• The elephant. The elephant is still in the refrigerator.
• This question tests whether or not you have comprehensive thinking skills.
IQ Test• If you did not answer the
first three questions correctly, this next question is your last chance to show your qualifications as a professional.
IQ Test• There is a river inhabited by
crocodiles. How do you manage to get to the other side?
• Swim through it. All of the animals, including the crocodiles, are attending the animal conference. (Except for the elephant, of course.)
IQ Test• Don’t be frustrated if you failed
this test. According to Anderson Consulting Worldwide, about 90% of the professionals failed the test.
• However, many preschoolers got it correct, thus disproving the popular theory that most “professionals” have the brains of a four-year old.
The End