The payroll of YellowCard Company for September 2013 is as follows. Total payrol
ID: 2498520 • Letter: T
Question
The payroll of YellowCard Company for September 2013 is as follows.
Total payroll was $460,500, of which $148,500 is exempt from Social Security tax because it represented amounts paid in excess of $106,800 to certain employees. The amount paid to employees in excess of $7,000 was $402,200. Income taxes in the amount of $85,220 were withheld, as was $8,930 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 $106,800 and 1.45% in excess of $106,800. 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. 5,275. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts .Credit account titles are automatically indented when amount is entered. Do not indent manually.)
No.
Account Titles and Explanation
Debit
Credit
Show List of Accounts
No.
Account Titles and Explanation
Debit
Credit
(a) (b)Explanation / Answer
Answer:(a) journal entries if (a) the wages and salaries paid
Salaries and Wages Expense A/c Dr. $ 460500
To Withholding Taxes Payable A/C $ 85,220
To FICA Taxes Payable A/C* $26021.25
To Union Dues Payable A/C $ 8930
To Cash $340328.75
[($460500-$148,500)*7.65%]=23868
[148500*1.45%=2153.25]
=23868+2153.25=26021.25
Answer:(b) the employer payroll taxes are recorded separately.
Payroll Tax Expense A/C Dr, $27187.25
To FICA Taxes Payable A/C $26021.25
To FUTA Taxes Payable A/C $ 466.40 [($460500-$402,200)*0.8%]
To SUTA Taxes Payable A/C $699.6 [($460500-$402,200)*(3.5%-2.3%)]
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.