Soprano Construction Company uses the job order cost system. In recording payroll transactions, the…

Summary of Payroll Procedures

Soprano Construction Company uses the job order cost system. In recording payroll transactions, the following accounts are used:

Cash

Administrative Salaries

Wages Payable

Miscellaneous Administrative Expense

FICA Tax Payable

Sales Salaries

Federal Unemployment Tax Payable

Miscellaneous Selling Expense

State Unemployment Tax Payable

Factory Overhead

Employees Income Tax Payable

Work In Process

Payroll

Factory employees are paid weekly, while all other employees are paid semimonthly on the 15th and the last day of each month. All salaries and wages are subject to all taxes. Following is a narrative of transactions completed during the month of January:

Jan.7 Recorded total earnings of factory employees, amounting to $68,200, less deductions for employees' income taxes and FICA taxes.

7th Issued check for payment of the payroll

14th Recorded total earnings of factory employees amounting to $66,300, less deductions for employees' income taxes and FICA taxes.

14th Issued check for payment of the payroll

15th Recorded administrative salaries, $9,000, and sales Salaries, $17,000, less deductions for employees' income taxes and FICA taxes.

15th Issued check for payment of the salaries.

21st Recorded total earnings of factory employees amounting to $72,500, less deductions for the employees' income taxes and FICA taxes.

21st Issued check for payment of payroll.

28th Recorded total earnings of factory employees amounting to $74,200, less deductions for employees' income taxes and FICA taxes.

28th Issued check for payment of payroll

31st Recorded administrative salaries, $9,000, and sales salaries, $17,000, less deductions for employees' income taxes and FICA taxes.

31st Issued check for payment of the salaries

31st The following wages and salaries were earned or accrued during January:.

Direct Labor

302,500

Indirect Labor

22,500

Administrative Salaries

18,000

Sales Salaries

34,000

Total

377,000

Soprano Construction Company used the following form to compute the amount of payroll taxes incurred:

Items Taxable Earnings FICA Tax Federal Unemployment Tax State Unemployment

Tax Total Payroll Taxes

Factory wages

Administrative Wages

Sales salaries

Total

Required:

1. Complete the previous form to show the payroll taxes imposed on the employer for the month of January.

2. Prepare the journal entries to record the foregoing transactions, including the distribution of payroll costs and payroll taxes, assuming that the payroll taxes imposed on the employer for factory wages are to be charged to Factory Overhead, the taxes for Administrative salaries are to be charged to Miscellaneous Administrative expense, and the taxes for sales salaries are to be charged to Miscellaneous Selling Expense.

3. Assume that the factory employees worked on January 29, 30, and 31. What was the amount of accrued wages on January 31?

"Is this question part of your assignment? We can help"

ORDER NOW

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *