Exercise 13-9 (Part Level Submission) Amount Subject to Payroll Taxes Unemployme

Question

Exercise 13-9 (Part Level Submission)

Amount Subject to Payroll Taxes

Unemployment Tax

Payroll

Wages Due

Federal

State

(a)

Factory

Sales

Administrative

Total

Exercise 13-9 (Part Level Submission)

Green Day Hardware Company’s payroll for November 2014 is summarized below.

Amount Subject to Payroll Taxes

Unemployment Tax

Payroll

Wages Due

Federal

State

Factory $148,000 $49,000 $49,000 Sales 36,700 5,700 5,700 Administrative 42,400    Total $227,100 $54,700 $54,700
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 $109,800 and 1.45% in excess of $109,800. Of the $227,100 wages subject to FICA tax, $24,000 of the sales wages is in excess of $109,800. Federal unemployment tax rate is 0.8% after credits. Income tax withheld amounts to $16,830 for factory, $6,700 for sales, and $5,600 for administrative.

Explanation / Answer

Factory Sales Administrative Total Salaries and Wages 148000 36700 42400 227100 $ FICA Taxes 11322 1320 3244 15885 148000*.0765 ((36700-24000)*0.0765)+(24000*0.0145) 42400*.0765 FUTA Taxes 392 46 0 438 49000*0.8% 5700*0.8% SUTA Taxes 1225 143 0 1368 49000*2.5% 5700*2.5% Total Cost 160939 38208 45644 244790 $

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