 In this presentation, we will enter a journal entry related to the payment of payroll taxes. Before this point, we have recorded payroll taxes for both the employee and employer portion. Now we're going to work on the payment of those payroll taxes. The recording of the employee and employer portion of payroll taxes came from the register as well as a worksheet for the employer portion. In other words, we have four employees here, four employees represented by this set of numbers. If we sum those up then, this $487.19 is the regular pay for the four employees. We took from that the OASTI Social Security, the H.I., the Medicare, the FIT, Federal Income Tax, Group Insurance, Union dues, 401k plan to get to the net pay. This information was used in order to create the journal entry related to the employee payroll. Then we used this worksheet in order to create the journal entry for the employer portion of the taxes, including their portion, our portion, as the employer of OASTI Social Security, H.I., Medicare, FUTA, Federal Unemployment Tax, and SUTA, State Unemployment Tax. Then if we look at the results then on our trial balance, which is always nice to have a trial balance when recording journal entries, we'll see that we have the FUTA, OASTI, here, 606310, this is the FICA, OASTI Social Security, and then the FICA for the H.I., Medicare, the FUTA, Federal Unemployment Tax, the SUTA, State Unemployment, and the FIT, Federal Income Tax. These then are what we're going to pay now. These are liabilities. They include both the employer and employee portion of the taxes. In other words, this Social Security Medicare includes the tax both from what we took out of the employee wages and what we owe for the employer half as well. The FUTA and SUTA, the FUTA will be an employer tax and the SUTA for our case will be an employer tax. The FIT, Federal Income Tax for employees is just an employee tax. So that's going to be here. We're not paying any FIT. It's all coming out of the check of the employee. So if we build this journal entry then, what we're doing in essence is we're just saying, hey, these are the things we owe. We're going to make payment for them. Note that if we made payment in practice, we would probably have to group the payment in terms of federal taxes and state taxes. Probably we're going to group then the OASDI and the Social Security or the HI, meaning the Social Security Medicare would both be going to the Fed, which we made group in one payment. We may have a separate payment for FUTA and a separate payment for SUTA because it's going to the state. And so just note that the groupings of the payments as to how we're going to write the checks and the groupings of the payment could differ. But the point is that after we have these liabilities, we will be making the payment in the future. We're going to record the journal entry related to making the payment, which will be similar to any type of payable accounts such as the accounts payable, meaning the liability goes up and now we're paying it and the liability goes down as well as cash goes down. So to create this, we're just going to say, okay, we had account 215 for OASDI, credit of 6061.10. We need to make it go down to zero because we're going to pay it off. So we're going to debit it to the opposite thing to it, 6061.10. Same thing for HI, we have and then if we post that as we go, apparently we're going to post that as we go, it goes down to zero. That's what we want to happen. So we're going to make all these go down to zero. Then the HI and the Medicare, same thing. We're going to say it has a credit here, we're going to debit it doing the opposite thing to it. And if we post that as we go, it's going to make it go down to zero. That's what we want. Then we've got the FUTA has a credit in it. So we're going to debit it for that same amount. Then if we post it, it's going to go down to zero. And then we have the SUTA, which again, it's going to be debited for that same amount. Then if we post it, it's going to go down to zero. And then we have the FIT, which is going to be, it's a credit here. So we're going to debit it for the same amount. And then if we post it, it's going to go down to zero. Then if we add all these up, it should add up to what we're going to pay, which will be the check here. So that's going to be the credit. So what are we going to actually pay? If we have pull out the whole calculator here, 6063.1 plus 14417.98 for Medicare plus 12538 for FUTA plus 867.56 for SUTA and 899.13 for FIT. That gives us 9373.15. And something must have gone wrong there. Let's try that one more time. We're going to say 6063.1 plus the 14417.98 plus the 12538 plus the 867.56 and the 8599.13 gives us 1773.15. That's how much we're actually going to pay. So that'll come out of cash. Cash is a debit. We're going to make it go down by doing the opposite thing to it, a credit, bringing the balance down to 554, 660, and 74 cents. Now, if we see the whole thing, then here's our journal entry at the end. What happened here is the cash went down and the liabilities have now gone down because we've paid them off in a similar fashion as any payable type of account, similar to how accounts payable would be. Note two, no effect on net income. Just like when we pay off accounts payable, we haven't incurred the expense at the point in time that we paid the cash. We incurred the expense prior when people worked and when we recorded the journal entry at that point. So when we pay off the payable, no effect on these accounts down here. These are all liabilities accounts and an asset account, no revenue or expense accounts. If we look at the GL, it could be useful to look at the GL to see how this all ties together. So here's our journal entry. We posted the FICA OASDI here. Before we did that, we had 6063 in it. That was the employee portion of FICA Social Security and the employee employer portion, bringing us to 606310. Then we paid it off. That's going to be how this payable account should look and how most payable accounts should look if it's a nice even payable, meaning the liability goes up. So it's going to be the employee and employer portion every time. And then at some point later, a little bit later, when we make the payment, it goes back down to zero. And then if we do the same for H.I. or Medicare, same thing. It was at 104798, we paid 1014, 104798, bringing it down to zero. So same pattern. It's going to go up by the employee portion, up by the employee portion, and then we pay it goes down to zero. FUTA, we have the FUTA over here. It was at 12538, then we paid 12538, goes back down to zero. Note there's only one portion, only the employee or portion, and then we paid off the employee or portion. There's no matching there. We can see that in the GL. And then if we go to the FIT, so we have the FIT here. And it started at, it was at 80559913. It's going, we paid it, then it goes down to zero. Note again, there's only one entry here. And the reason there's one entry isn't because, is because it's an employee portion, meaning this is not an employee or tax. It only comes out of the employee paycheck. So this is an employee tax that we paid off no matching here. Then we have the FUTA, which is the state unemployment tax. And that's going to be, it was at 86756. We brought it down to zero. We're paying off the FUTA. Again, typically in our problem, it's only a employee or tax. It could have an employee portion depending on the state, but that'll depend on the state. We're going to mirror here, in essence, the employee or function of it. And many times it'll, it'll mirror kind of the FUTA and the SUTA will be similar in, in the way it's constructed oftentimes, depending on the state. The end.