During the month of March, Lavonis Company’s employees earned wages of $82,800. Withholdings related to these wages were $6,334 for Social Security (FICA), $9,703 for federal income tax, $4,011 for state income tax, and $518 for union dues. The company incurred no cost related to these earnings for federal unemployment tax, but incurred $906 for state unemployment tax. (a) Prepare the necessary March 31 journal entry to record wages expense and wages payable. Assume that wages earned during March will be paid during April. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) (b) Prepare the entry to record the company’s payroll tax expense. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Exercise 10-5

During the month of March, Lavonis Company’s employees earned wages of $82,800. Withholdings related to these wages were $6,334 for Social Security (FICA), $9,703 for federal income tax, $4,011 for state income tax, and $518 for union dues. The company incurred no cost related to these earnings for federal unemployment tax, but incurred $906 for state unemployment tax.

(a) Prepare the necessary March 31 journal entry to record wages expense and wages payable. Assume that wages earned during March will be paid during April. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

(b) Prepare the entry to record the company’s payroll tax expense. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

 

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