The payroll register for Gamble Company for the week ended April 29 indicated the following: Salaries $1,250,000 Social security tax withheld 75,000 Medicare tax withheld 18,750 Federal income tax withheld 250,000 In addition, state and federal unemployment taxes were calculated at the rate of 5.4% and 0.6%, respectively, on $225,000 of salaries. Required: a. Journalize the entry to record the payroll for the week of April 29. b. Journalize the entry to record the payroll tax expense incurred for the week of April 29.

Answer with its Explanation:

Part A. The with held taxes will adjusted against the salaries which means with held taxes will be credited and the salaries accrued will be debited and the difference of the accrued salary and with held taxes will go to the salaries payables (Credit).

The double entry is given as under:

Dr Salaries Expenses                    $1,250,000

Cr Social Security Payables                     $75,000

Cr Medicare Tax Payables                       $18,750

Cr Federal Income Tax Payables            $250,000

Cr Salaries Payables                                $906,250

Part B. The state and federal unemployment taxes will also result in the increase in the salaries expense just like the with held taxes.

The double entry would be as under:

Dr Salaries Expense                                  $13,500

Cr State Unemployment Taxes                             $12,150 (225,000 * 5.4%)

Cr Federal Unemployment Taxes                         $1,350 (225,000 * 0.6%)

answer; foreign exchange transaction;