Excel Products Inc.pays its employees semimonthly.The summary of the payroll for December 31,indicated the following: For the year ended December 31,$40,000 of the December 31 payroll is subject to social security tax of 6.0%; $120,000 is subject to Medicare tax of 1.5%; $10,000 is subject to state unemployment tax of 4.3% and federal unemployment tax of 0.8%.As of January 1,of the following year,all of the $120,000 is subject to all payroll taxes.Prepare the journal entries for payroll tax expense if the employees are paid
(a)December 31 of the current year or
(b)January 2 of the following year.

Question

Excel Products Inc.pays its employees semimonthly.The summary of the payroll for December 31,indicated the following:​  For the year ended December 31,$40,000 of the December 31 payroll is subject to social security tax of 6.0%; $120,000 is subject to Medicare tax of 1.5%; $10,000 is subject to state unemployment tax of 4.3% and federal unemployment tax of 0.8%.As of January 1,of the following year,all of the $120,000 is subject to all payroll taxes.Prepare the journal entries for payroll tax expense if the employees are paid 
(a)December 31 of the current year or 
(b)January 2 of the following year.

Quizplus · Accepted Answer

The Answer of Excel Products Inc.pays its employees semimonthly.The summary of the payroll for December 31,indicated the following:​  For the year ended December 31,$40,000 of the December 31 payroll is subject to social security tax of 6.0%; $120,000 is subject to Medicare tax of 1.5%; $10,000 is subject to state unemployment tax of 4.3% and federal unemployment tax of 0.8%.As of January 1,of the following year,all of the $120,000 is subject to all payroll taxes.Prepare the journal entries for payroll tax expense if the employees are paid 
(a)December 31 of the current year or 
(b)January 2 of the following year.