Payroll Tax: The tax paid on the total earnings of employee is called payroll tax expense. Employer needs to calculate the payroll tax expense on the basis of gross earnings of the employee and deposit the total amount to respective authorities.
Federal Insurance Contributions Act (FICA) Tax: It is a tax applicable on employees’ earnings as a certain percentage. Employers are also supposed to contribute their share and deposit the combined amount to the federal body.
Federal
State Unemployment Tax Act (SUTA): It is same as federal unemployment tax act, only difference is that it is a program by states. The employees who lost their employment due to any reason other than their own fault are benefitted from this program.
Journal Entries: Entries to record the financial transactions during each accounting period are called journal entries. Income, liabilities and the giver are credited if the balance is increased and debited if the balance is reduced Expenses, assets and the receiver are debited if the balance is increased and credited if the balance is reduced in a
To record: The employer’s payroll taxes.
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Chapter 11 Solutions
ACCOUNTING PRCINCIPLES (CCCS CUSTOM)
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- Question: If the contribution margin ratio for Bhutan Company is 45%, sales were $425,000, and fixed costs were $100,000, what was the income from operations?arrow_forwardIn July, one of the processing departments at Felstone Corporation had an ending work in process inventory of $15,800. During the month, $472,000 of costs were added to production, and the cost of units transferred out from the department was $495,000. In the department's cost reconciliation report for July, what would be the cost of beginning work in process inventory for the department?arrow_forwardAssume the actual sales volume is 74,500 units and the budgeted sales volume is 76,000 units. If the actual sales price is $7.20 and the budgeted sales price is $7.80, what is the sales volume variance? a) $11,700 unfavorable b) $11,700 favorable c) $10,500 unfavorable d) $10,500 favorablearrow_forward
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