The following payroll liability accounts are included in the ledger of Harmon Company on January 1, 2019
| FICA Taxes Payable | $760.00 |
| Federal Income Taxes Payable | 1,204.60 |
| State income Taxes Payable | 108.95 |
| Federal Unemployment Taxes Payable | 288.95 |
| State Unemployment Taxes Payable | 1,954.40 |
| Union Dues Payable | 870.00 |
| U.S. Savings Bonds Payable | 360.00 |
In January, the following transactions occurred.
| Jan. 10 | Sent check for $870.00 to union treasurer for union dues. |
| 12 | Remitted check for $1,964.60 to he Federal Reserve bank for FICA taxes and federal income taxes withheld. |
| 15 | Purchased U.S. Savings Bonds for employees by writing check for $360.00. |
| 17 | Paid state income taxes withheld from employees. |
| 20 | Paid federal and state unemployment taxes. |
| 31 | Completed monthly payroll register, which shows salaries and wages $58,000, FICA taxes withheld $4,437, federal income taxes payable $2,158, state income taxes payable $454, union dues payable $400, United Fund contributions payable $1,888, and net pay $48,663. |
| 31 | Prepared payroll checks for the net pay and distributed checks to employees. |
At January 31, the company also makes the following accrued adjustments pertaining to employee compensation.
- Employer payroll taxes: FICA taxes 7.65%, federal unemployment taxes 0.8%, and state unemployment taxes 5.4%.
- Vacation pay: 6% of gross earnings.
Instructions
- Journalize the January transactions.
- Journalize the adjustments pertaining to employee compensation at January 31.
Solution
a.
Harmon Company
Journal Entries
Journal Entries
b.
Harmon Company
Adjusting Entries
Adjusting Entries
