JML Institute Online:  BCS
lecture 2C2E: part 1
PAYROLL:

	Running a business takes discipline.  Once you put your capital into the business you must realize that its no longer yours.  None of the money that touches you hands is yours.  It's belongs to your business.  In the old days a farmer could pay off his hired hands and keep the rest in his pocket, but he knew somehow he had to come up with "seed money" for the next year and the "revenuers" would come sooner or later for their taxes.

	A good bookeeping system keeps these often forgotten taxes in account of their own: taxes payable.  They are deducted from employee wages by debiting TAXES PAYABLE and crediting CASH. Payroll is SALARY.EXP.  Once you run your payroll program, the totals must be transacted by adding     debiting SALARY.EXP. $1100, and crediting taxes payables 110 & 55. a credit to  CASH 
for EX. $935.

	Also the employer too must pay taxes based on payroll amounts.  FICA, FED, STATE unemployment taxes payable are credited and payroll tax expense is debited 55, 4.4, 33.

1.   Equal amount of FICA = 55
2.   FEDUNEMTX = .4% x 1100 = $4.40
3. STATEUETX = 3% x 1100 = $33
____________________________________________________
					Trial Balance		
					Debits	Credits		Debits	Credits 
010	CASH			5000						935		 
020	ACCT.REC		2000		
030	INVENTORY		6000		
040	SUPPLIES		 300		
050	PREPD.INS	 	 200		
210	OWN.DRAW		1000
220	OWN CAPTL				5455			
230	ACCT.PAY				9000
235	EMPINCTAX.PAY			 					110					APPROX=10%
236 FICATAX.PAY								 55					APPROX=5%
												 55
236 FEDUNEMTX.PAY								  4.40				APPROX=.4%
236 STATEUETX.PAY								 33 				APPROX=3%
240	INCOMESUM
250	SALES					3400
255	PURCHASES		3300
260	DELIV.EXP        55
270	INSUR.EXP 							
280	SALARY.EXP							1100	
282	PAYRLTAX.EXP						  55 
										   4.4
										  33				
285	RENT.EXP
290	SUPPLY.EXP
________________________________
					17855	17855

In the month after each 3-month quarter, government taxes must be paid.  So a check will be sent to the feds for FICATAX.PAY debited for _____.  and EMPINCTX.PAY debited for ______. CASH will be credited ________.