The following payroll liability accounts are included in the ledger of Pettibone Company on January 1, 2010.
FICA Taxes Payable ....... $ 540
Federal Income Taxes Payable .... 1,100
State Income Taxes Payable ..... 210
Federal Unemployment Taxes Payable . 54
State Unemployment Taxes Payable .... 365
Union Dues Payable ........ 200
U.S. Savings Bonds Payable ...... 300
In January, the following transactions occurred.
Jan. 10 Sent check for $200 to union treasurer for union dues.
12 Deposited check for $1,640 in Federal Reserve bank for FICA taxes and federal income taxes withheld.
15 Purchased U.S. Savings Bonds for employees by writing check for $300.
17 Paid state income taxes withheld from employees.
20 Paid federal and state unemployment taxes.
31 Completed monthly payroll register, which shows office salaries $17,400, store wages
$22,500, FICA taxes withheld $3,192, federal income taxes payable $2,540, state income taxes payable $500, union dues payable $300, United Way contributions payable $1,300, and net pay $32,068.
31 Prepared payroll checks for the net pay and distributed checks to employees.
At January 31, the company also makes the following accruals pertaining to employee compensation.
1. Employer payroll taxes: FICA taxes 8%, state unemployment taxes 5.4%, and federal unemployment taxes 0.8%.
2. Vacation pay: 5% of gross earnings.
Instructions
(a) Journalize the January transactions.
(b) Journalize the adjustments pertaining to employee compensation at January 31.