Cedarville Company pays its office employee payroll weekly. Below is a partial list of employees and their payroll data for August. Because August is their vacation period, vacation pay is also listed.
Employee |
|
Earnings to
July 31 |
|
Weekly
Pay |
|
Vacation Pay to Be
Received in August |
| Mark Hamill |
|
$4,200 |
|
|
$200 |
|
|
- |
|
| Karen Robbins |
|
3,500 |
|
|
150 |
|
|
$300 |
|
| Brent Kirk |
|
2,700 |
|
|
110 |
|
|
220 |
|
| Alec Guinness |
|
7,400 |
|
|
250 |
|
|
- |
|
| Ken Sprouse |
|
8,000 |
|
|
330 |
|
|
660 |
|
Assume that the federal income tax withheld is 10% of wages. Union dues withheld are 2% of wages. Vacations are taken the second and third weeks of August by Robbins, Kirk, and Sprouse. The state unemployment tax rate is 2.5% and the federal is 0.8%, both on a $7,000 maximum. The FICA rate is 7.65% on employee and employer on a maximum of $110,100 per employee. In addition, a 1.45% rate is charged both employer and employee for an employee's wages in excess of $110,100.
Make the journal entries necessary for each of the four August payrolls. The entries for the payroll and for the company's liability are made separately. Also make the entry to record the monthly payment of accrued payroll liabilities.