Level 5: Payroll, assets and equity · Exercise 57 of 72 · Pro

Remitting payroll taxes

A journal entry exercise from Journaldrill. Solve it with an account picker and debit and credit fields in your browser, and it is checked the moment you submit.

The task

Northgate Print Shop makes its monthly federal payroll tax deposit. Before the deposit its books show Federal Income Tax Payable of $6,240, Social Security Tax Payable of $5,952 (employee and employer shares) and Medicare Tax Payable of $1,392. Record the deposit.

What this exercise teaches

Each payable is debited for its balance and Cash is credited for the $6,240 + $5,952 + $1,392 = $13,584 deposit. The employer's share of Social Security and Medicare was already expensed through Payroll Tax Expense when the payroll was recorded, and the employee withholdings were never the employer's expense, so no expense account appears in the remittance.

A hint if you get stuck

The expense was recorded when payroll was run. Paying the government settles liabilities only.