two intermediate accounting questions

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Business Finance

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The following are two intermediate accounting questions.

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1. (3 points) The November 2017 payroll of Walnut Company is $4,200,000, of which $560,000 is exempt from Social Security tax because it represented amounts paid to certain employees in excess of $127,200. The amount paid to employees in excess of $7,000 was $3,950,000. Amounts withheld by Walnut were $906,000 for federal income taxes, $113,000 for state income taxes, $105,000 in charitable contributions, and $168,000 for 401-K employee contributions. Walnut’s effective state unemployment tax rate is 1.9% and the effective federal unemployment tax rate 0.6%. Prepare the journal entries Walnut should make to reflect its payroll expense and its payroll taxes expense. 2. (2 points) J had $680,000 in its vacation payable account on 12-31-14. A detailed analysis of its vacation liability as of 12-31-15 indicated J needed a payable balance of $709,000. During 2015, J accrued for and recorded $721,000 of paid vacation expense. In addition, during 2015 J paid its employees $678,000 for paid vacation time. a. Prepare J’s 2015 entries related to vacation. b. What was J’s vacation expense for the year ended 12-31-15?
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1.

(3 points) The November 2017 payroll of Walnut Company is $4,200,000, of which $560,000 is exempt from Social
Security tax because it represented amounts paid to certain employees in excess of $127,200. The amount paid to
employees in excess of $7,000 was $3,950,000. Amounts withheld by Walnut were $906,000 for federal income
taxes, $113,000 for state income taxes, $105,000 in charitable contributions, and $168,000 for 401-K employee
contributions. Wa...


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