The payroll of Wildhorse Company for September 2025 is as follows. Total payroll was $458,000, of which $110,000 is exempt from Social Security tax because it represented amounts paid in excess of $142,800 to certain employees. The amount paid to employees in excess of $7,000 (the maximum for both federal and state unemployment taxes) was $363,000. Income taxes in the amount of $81,800 were withheld, as was $9,300 in union dues. The state unemployment tax is 3.5%, but Wildhorse Company is allowed a credit of 2.3% by the state for its unemployment experience. Also, assume that the current FICA tax is 7.65% on an employee's wages to $142,800 and 1.45% in excess of $142,800. The federal unemployment tax rate is 0.8% after state credit. Prepare the necessary journal entries if the wages and salaries paid and the employer payroll taxes are recorded separately. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The payroll of Wildhorse Company for September 2025 is as follows.
Total payroll was $458,000, of which $110,000 is exempt from Social Security tax because it represented amounts paid in excess of
$142,800 to certain employees. The amount paid to employees in excess of $7,000 (the maximum for both federal and state
unemployment taxes) was $363,000. Income taxes in the amount of $81,800 were withheld, as was $9,300 in union dues. The state
unemployment tax is 3.5%, but Wildhorse Company is allowed a credit of 2.3% by the state for its unemployment experience. Also,
assume that the current FICA tax is 7.65% on an employee's wages to $142,800 and 1.45% in excess of $142,800. The federal
unemployment tax rate is 0.8% after state credit.
Prepare the necessary journal entries if the wages and salaries paid and the employer payroll taxes are recorded separately. (If no
entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically
indented when amount is entered. Do not indent manually. List all debit entries before credit entries.)
Account Titles and Explanation
(To record salaries and wages paid and the employee payroll deductions)
To record employer payroll taxes)
Debit
VEN
Credit
10 000
Transcribed Image Text:The payroll of Wildhorse Company for September 2025 is as follows. Total payroll was $458,000, of which $110,000 is exempt from Social Security tax because it represented amounts paid in excess of $142,800 to certain employees. The amount paid to employees in excess of $7,000 (the maximum for both federal and state unemployment taxes) was $363,000. Income taxes in the amount of $81,800 were withheld, as was $9,300 in union dues. The state unemployment tax is 3.5%, but Wildhorse Company is allowed a credit of 2.3% by the state for its unemployment experience. Also, assume that the current FICA tax is 7.65% on an employee's wages to $142,800 and 1.45% in excess of $142,800. The federal unemployment tax rate is 0.8% after state credit. Prepare the necessary journal entries if the wages and salaries paid and the employer payroll taxes are recorded separately. (If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. List all debit entries before credit entries.) Account Titles and Explanation (To record salaries and wages paid and the employee payroll deductions) To record employer payroll taxes) Debit VEN Credit 10 000
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