P1. The following information pertains to the payrolls of A Company for the mont
ID: 2407474 • Letter: P
Question
P1. The following information pertains to the payrolls of A Company for the month of July 2017: ployee Wage earned State/local Wage earned in July 2017 Em Federal Income By 6/30/2017 Tax ncome laxes $ l 10,000 $900 250 50 $18,000 Jane Tom Bill 60,000 6,000 10,000 1,100 $2,500 1,200 300 Actual state unemployment tax rate is 4%, while the federal unemployment tax rate is 0.08%. The taxable income limit for social security tax is $118,000/person, year, while the taxable income limit for SUTA and FUTA is $7,000/ person, year. Instructions: Prepare the necessary journal entries for July payrolls of A Company if salaries and wages are paid in cash after withholding all payroll taxes and dues.Explanation / Answer
Notes
Social Security Tax is 6.2 % of Earnings up to 118,000.
For Jane - 8000*6.2% = 496
For Tom - 10000*6.2% = 620
For Bill = 1100*6.2% = 68.20
Medicare Tax = 1.45% of Earnings
Notes:
We would have already paid SUTA and FUTA for all the employees except for Bill which is captured in the above transaction.
SUTA = 1000*4% =400
FUTA = 1000*0.08% = .80
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Employee Gross Earnings Federal Income Tax State Income Income Tax Social Security Tax Medicare Tax Net Earnings Jane $ 18,000.00 $ 2,500.00 $ 900.00 $ 496.00 $ 261.00 $ 13,843.00 Tom $ 10,000.00 $ 1,200.00 $ 250.00 $ 620.00 $ 145.00 $ 7,785.00 Bill $ 1,100.00 $ 300.00 $ 50.00 $ 68.20 $ 15.95 $ 665.85 $ 29,100.00 $ 4,000.00 $ 1,200.00 $ 1,184.20 $ 421.95 $ 22,293.85Related Questions
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