The payroll summary for December 31 for Waters Co. revealed total earnings of $8

Question

The payroll summary for December 31 for Waters Co. revealed total earnings of $80,000 (of which $3,000 are subject to unemployment tax). All earnings are subject to social security tax of 6.0% and Medicare tax of 1.5%. The state unemployment compensation tax rate is 4.3% and the federal unemployment compensation tax rate is 0.8%.

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Explanation / Answer

Payroll Tax Expense 6153          Social Security Tax Payable 4800 =80000*6%          Medicare Tax Payable 1200 =80000*1.5%           State Unemployment Compensation Tax Payable 129 =3000*4.3%           Federal Unemployment Compensation Tax Payable 24 =3000*0.8%

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