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.
College Accounting (Book Only): A Career Approach
13th Edition
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:Scott, Cathy J.
Chapter8: Employer Taxes, Payments, And Reports
Section: Chapter Questions
Problem 4E
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