ESSAY. Write your answer in the space provided or on a separate sheet of paper.
21 ) Midwest Shipping pays employees at the end of each month. Payroll information is listed below for January, the first month of the fiscal year. Assume that none of the employees exceeds the Federal unemployment tax maximum salary of $7,000 in January.
Salaries $800,000
Federal and state income taxes withheld 160,000
Federal unemployment tax rate 0.80%
State unemployment tax rate (after FUT A deduction) 3.00%
Social Security (FICA) tax rate 7.65%
Record salaries expense and payroll tax expense for the January pay period.
22) On September 1, 2021, Allied Moving Corp. borrows $100,000 cash from First National Bank. Allied signs a six-month, 6% note payable. Interest is payable at maturity. Allied’s year-end is December 31.
1. Record the note payable by Allied Moving Corp.
2. Record the appropriate adjusting entry for the note by Allied Moving Corp. on December 31, 2021.
3. Record the payment of the note at maturity.