Exercise 13-9 Green Day Hardware Company\'s payroll for November 2014 is summari

Question

Exercise 13-9 Green Day Hardware Company's payroll for November 2014 is summarized below Amount Subject to Payroll Taxes Unemployment Tax Federal Payroll Wages Due $184,000 37,200 43,200 $264,400 State Factory Sales Administrative $44,000 4,300 $44,000 4,300 Total $48,300 $48,300 At this point in the year, some employees have already received wages in excess of those to which payroll taxes apply. Assume that the state unemployment tax is 2.5%. The FICA rate is 7.65% on an employee's wages to $112,700 and 1.45% in excess of $112,700. Of the $264,400 wages subject to FICA tax, $24,000 of the sales wages is in excess of $112,700. Federal unemployment tax rate is 0.8% after credits. Income tax withheld amounts to $16,560 for factory, $6,890 for sales, and $5,790 for administrative.

Explanation / Answer

Administrative payroll: Factory Sales Payroll: Administrative Debit Credit Debit Credit Debit Credit Salaries and wages expenses 184,000.00 37,200.00 43,200.00 Withholding tax payable 16,560.00 6,890.00 5,790.00 FICA Tax Payable 14,076.00 1,358.00 3,305.00 Cash 153,364.00 28,952.00            34,105.00 (To record salaries and wages expenses) Payroll Tax expenses 102,076.00 9,958.00              3,305.00 FICA Tax payable 14,076.00 1,358.00 3,305.00 FUTA Tax payable 44,000.00 4,300.00 -   SUTA Tax payable 44,000.00 4,300.00 -   (To record payroll tax expenses)

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