Question 4 payroll of YellowCard Company for September 2013 is as follows The To

Question

Question 4 payroll of YellowCard Company for September 2013 is as follows The Total payroll was $480,000, of which $110,000 is exempt from Social Security tax because it represented amounts paid in excess of $113,700 to certain employees The amount paid to employees in excess of $7,000 was $400,000. Income taxes in the amount of $80,000 were withheld, as was $9,000 in union dues. The state unemployment tax is 3.5%, but YellowCard 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 $113,700 and 1.45% in excess of $113,700. No employee for YellowCard makes more than $125,000. The federal unemployment tax rate is 0.8% after state credit. Prepare the necessary journal entries if (a) the wages and salaries paid and (b) the employer payroll taxes are recorded separately. (Round answers to 0 decimal places, e.g. 5,250. 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.) No. Account Titles and Explanation Debit Credit (b)

Explanation / Answer

FICA tax =370000*7.65%+110000*1.45%

= 28305+1595

= 29900

State unemployment tax = 80000*2.3%=1840

Federal unemployment tax. = 80000*.8%=640

. Account titles debit credita a. Wages and salaries expens
FICA tax payable
Income tax withholding payable
Union dues payable
Cash
(To record the salaries and wages paid and amount withheld) 480000






29900
80000
9000
361100

b. FICA expense
State unemployment tax expense
Federal unemployment tax expense
FICA tax payable
State unemployment tax payable
Federal unemployment tax payable
(To record emplyer payroll tax)
29900
1840
640






29900
1840
640

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