According to a summary of the payroll of Newman Publishing Co., $600,000 was sub

Question

According to a summary of the payroll of Newman Publishing Co., $600,000 was subject to the 7.5% FICA tax. Also, $50,000 was subject to state and federal unemployment taxes. On both, please show the work towards the conclusion/answer you came up with.

a) Calculate the employer's payroll taxes, using the following rates:
- State unemployment 4.3%
- Federal unemployment 0.8%

b) Illustrate the effects on the accounts and financial statements of recording the accrual of payroll taxes.

Thank you in advance for your help on this.

Explanation / Answer

a State Unemployment Tax (7.5%-4.3%) of 600,000) 19200 Add: b Federal Unemployment Tax Payment 400 (0.8% of 50000) Total Federal Unemployment 19600

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