According to a summary of the payroll of Mountain Streaming Co., $770,000 was subject to the 6.0% social security tax and the 1.5% Medicare tax. Also, $42,000 was subject to state and federal unemployment taxes. Required: A. Calculate the employer's payroll taxes, using the following rates: state unemployment, 5.4%; federal unemployment, 0.8%. B. Journalize the entry to record the accrual of payroll taxes. Refer to the Chart of Accounts for exact wording of account titles.
According to a summary of the payroll of Mountain Streaming Co., $770,000 was subject to the 6.0% social security tax and the 1.5% Medicare tax. Also, $42,000 was subject to state and federal unemployment taxes. Required: A. Calculate the employer's payroll taxes, using the following rates: state unemployment, 5.4%; federal unemployment, 0.8%. B. Journalize the entry to record the accrual of payroll taxes. Refer to the Chart of Accounts for exact wording of account titles.
College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
22nd Edition
ISBN:9781305666160
Author:James A. Heintz, Robert W. Parry
Publisher:James A. Heintz, Robert W. Parry
Chapter9: Payroll Accounting: Employer Taxes And Reports
Section: Chapter Questions
Problem 1MP: The totals line from Nix Companys payroll register for the week ended March 31, 20--, is as follows:...
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Transcribed Image Text:Instructions
According to a summary of the payroll of Mountain Streaming Co., $770,000 was subject to the 6.0% social security tax and the 1.5% Medicare tax. Also, $42,000 was subject to state and
federal unemployment taxes.
Required:
A. Calculate the employer's payroll taxes, using the following rates: state unemployment, 5.4%; federal unemployment, 0.8%.
B. Journalize the entry to record the accrual of payroll taxes. Refer to the Chart of Accounts for exact wording of account titles.
Transcribed Image Text:Starting Question
a. Calculate the employer's payroll taxes, using the following rates: state unemployment, 5.4%; federal unemployment, 0.8%.
Journal
b. On December 31, journalize the entry to record the accrual of payroll taxes. Refer to the Chart of Accounts for exact wording of account titles.
1
2
3
4
5
DATE
Dec. 31 Payroll
DESCRIPTION
JOURNAL
POST. REF.
DEBIT
CREDIT
$336
ASSETS
ACCOUNTING EQUATION
PAGE 1
LIABILITIES
EQUITY
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