Title: Payroll Accounting for Walnut Co.**Payroll Overview**The total payroll for Walnut Co. amounted to $2,760,000. Of this amount, $480,000 was paid in excess of $137,700 (the annual FICA limit) to specific employees. The payments over $7,000 (the annual FUTA limit) totaled $2,160,000. Withheld income taxes were $675,000.**Tax Rates**- **State Unemployment Tax:** 1.2%- **Federal Unemployment Tax:** 0.8%- **FICA Tax:** 7.65% on salaries and wages up to $137,700, and 1.45% on amounts exceeding $137,700.- **Union Dues:** Withheld at 1% of the total payroll.**Instructions**1. Prepare a journal entry to record the salaries and wages paid and the employee payroll deductions.2. Prepare a journal entry to record the employer's payroll taxes.

Employers Payroll Tax: Employer payroll taxes are the component of payroll taxes that are the…

Total payroll of Walnut Co. was $2,760,000, of which $480,000 represented amounts paid in excess of $137,700 (the annual limit for FICA) to certain employees. The amount paid to employees in excess of $7,000 (the annual limit for FUTA) was $2,160,000. Income taxes withheld were $675,000. The state unemployment tax is 1.2%, the federal unemployment tax is 0.8%, and the FICA tax is 7.65% on an employee's salaries and wages to $137,700 and 1.45% in excess of $137,700. Union dues withheld are 1% of payroll. Instructions: 1. Prepare the journal entry to record the salaries and wages paid and the employee payroll deductions. 2. Prepare the journal entry to record the employer's payroll taxes.

Total payroll of Walnut Co. was $2,760,000, of which $480,000 represented amounts paid in excess of $137,700 (the annual limit for FICA) to certain employees. The amount paid to employees in excess of $7,000 (the annual limit for FUTA) was $2,160,000. Income taxes withheld were $675,000. The state unemployment tax is 1.2%, the federal unemployment tax is 0.8%, and the FICA tax is 7.65% on an employee's salaries and wages to $137,700 and 1.45% in excess of $137,700. Union dues withheld are 1% of payroll. Instructions: 1. Prepare the journal entry to record the salaries and wages paid and the employee payroll deductions. 2. Prepare the journal entry to record the employer's payroll taxes.

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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