Swordstone Market Payroll Accounting with Employee Withholdings Employer Payroll Taxes and Journal Entry Worked Solution

Swordstone Market, Inc., has three employees, Kindal Boyd, Brent Debenham, and Cesar Gaona. Summaries of their 2012 salaries and withholdings are as follows:

.:.

1. Prepare the summary entry for salaries paid to the employees for the year 2012.

2. Assume that, in addition to FICA taxes, the employer has incurred $236 for federal unemployment taxes and $785 for state unemployment taxes. Prepare the summary journal entry to record the payroll tax liability for 2012, assuming no taxes have yet been paid.

3. Interpretive Question: What other types of items are frequently withheld from employees’ paychecks in addition to income taxes and FICA taxes?

SOLUTION:

1. Salaries Expense 187,000

FICA Taxes Payable, Employees 14,306

Federal Income Taxes Withheld 37,400