Question

During the month of March, Karen Company's employees earned wages of $68,000. Withholdings related to these wages were $5,202 for Social Security (FICA), $14,700 for federal income tax, $6,300 for state income tax, and $900 for union dues. The company incurred no cost related to these earnings for federal unemployment tax, but incurred $2,000 for state unemployment tax.

Required:
Prepare the necessary March 31 journal entry to record wages expense and wages payable. Assume that wages earned during March will be paid during April.

Answer 1

Journal entry to record wages expense and wages payable

Step-by-step explanation:

As the company incurred no cost related to these earnings for federal unemployment tax so it would be excluded from wages and salaries expense

Entry DEBIT CREDIT

Salaries and wages Expense $68,000

Social Security(FICA) $5,202

Federal income tax $14,700

State income tax $6,300

union dues $900

Salaries and wages payable $40,898