Deacon Company Provides You with Following Information Related to Payroll

question 129

Essay

Deacon Company provides you with following information related to payroll transactions for the month of May. Prepare journal entries to record the transactions for May. $$\begin{array} { | r | r | r | r | r | } \hline \text { Office Salaries } & \text { Sales Salaries } & \begin{array} { r } \text { Social Security } \\\text { Taxes }\end{array} & \text { Medicare Taxes } & \text { Feder al Income Taxes } \\\hline \$ 38,000 & \$ 26,000 & \$ 3,968 & \$ 928 & \$ 5,600 \\\hline\end{array}$$ a. Recorded the May payroll using the payroll register information given above.
b. Recorded the employer's payroll taxes resulting from the May payroll. The company had a merit rating that reduces its state unemployment tax rate to 3.5% of the first $7,000 paid each employee. Only $42,000 of the current months salaries are subject to unemployment taxes. The federal rate is 0.6%.
c. Issued a check to Reliant Bank in payment of the May FICA and employee taxes.
d. Issued a check to the state for the payment of the SUTA taxes for the month of May.
e. Issued a check to Reliant Bank in payment of the employer's quarterly FUTA taxes for the first quarter in the amount of $1,020.

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Definitions:

Head of Household Status

A tax filing status available to unmarried taxpayers who provide a home for certain qualifying persons and pay more than half of home maintenance expenses.

Married

A marital status indicating that two individuals are legally united in marriage, influencing their filing status and tax considerations.

Adjusted Gross Income (AGI)

A calculation derived from your total earnings to ascertain the taxable portion of your income.

Deductions and Credits

Financial tools allowed by tax law to reduce taxable income or the tax itself, with deductions lowering taxable income and credits directly reducing the tax payable.