Answered

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Since Glo-Brite Paint Company withholds the city of Philadelphia income tax, you must deposit the taxes with the Department of Revenue. The deposit rule that affects Glo-Brite Paint Company states that if the withheld taxes are between $350 and $16,000 per month, the company must deposit the tax monthly by the 15th of the following month. The withheld taxes for the October payrolls were $1,209.18.

Required:
Prepare the journal entry to record the deposit of the taxes, and post to the appropriate ledger accounts.

Sagot :

anthougo

Answer:

Glo-Brite Paint Company

1. Journal Entry:

Nov. 15:

Debit Withheld Taxes Liability $1,209.18

Credit Cash $1,209.18

To record the payment of withheld taxes to the Department of Revenue.

2. T-accounts:

Withheld Taxes Liability

Account Titles                 Debit      Credit

Cash                             $1,209,18

Cash Account  

Account Titles                 Debit      Credit

Withheld Taxes Liability              $1,209,18

Explanation:

a) Data and Calculations:

October withheld taxes = $1,209.18

b) Withheld taxes are government-mandated taxes withheld from employees for remittance directly to the tax authorities.  Once they are withheld, they form a liability to the employer until remittance is made to the taxation authorities affected.

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