During the month of March, Preston Company's employees earned wages of $90,000. Withholdings related to these wages were $6,885 for Social Security (FICA), $14,200 for federal incom tax, $6,200 for state income tax, and $600 for union dues. The company incurred no cost related to these earnings for federal unemployment tax, but incurred $1,300 for state unemployment tax. Instructions (a) to record wages expense and wages payable. Assume that wages earned during March will be paid during April. (b) Indicate the accounts increased or decreased to record the company's payroll tax expense. Indicate the accounts increased or decreased on March 31

During the month of March, Preston Company's employees earned wages of $90,000. Withholdings related to these wages were $6,885 for Social Security (FICA), $14,200 for federal incom tax, $6,200 for state income tax, and $600 for union dues. The company incurred no cost related to these earnings for federal unemployment tax, but incurred $1,300 for state unemployment tax. Instructions (a) to record wages expense and wages payable. Assume that wages earned during March will be paid during April. (b) Indicate the accounts increased or decreased to record the company's payroll tax expense. Indicate the accounts increased or decreased on March 31

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Widmer Company had gross wages of $309,000 during the week ended June 17. The amount of wages subject to social security tax was $278,100, while the amount of wages subject to federal and state unemployment taxes was $39,000. Tax rates are as follows: Line Item Description Percentage Social security 6.0% Medicare 1.5% State unemployment 5.4% Federal unemployment 0.8% The total amount withheld from employee wages for federal taxes was $61,800. If an amount box does not require an entry, leave it blank. If required, round answers to two decimal places. Question Content Area a. Journalize the entry to record the payroll for the week of June 17. Date Account Debit Credit June 7 Question Content Area b. Journalize the entry to record the payroll tax expense incurred for the week of June 17. Date Account Debit Credit June 7
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On January 14, at the end of the second week of the year, the totals of Castle Company's payroll register showed that its store employees' wages amounted to $40,660 and that its warehouse wages amounted to $12,600. Withholdings consisted of federal income taxes, $6,391, employer's Social Security taxes at the rate of 6.2 percent, and employees' Social Security taxes at a rate of 6.2 percent. Both the employer's and employees' Social Security taxes are based on the first $118,500, and no employee has reached the limit. Additional withholdings were Medicare taxes at the rate of 1.45 percent on all earnings and charitable contributions withheld, $720. Required: a. Calculate the amount of Social Security and Medicare taxes to be withheld and prepare the general journal entry to record the payroll. If an amount box does not require an entry, leave it blank. If required, round your intermediate calculations and final answers to the nearest cent and use the rounded answers in…