(a) Complete the payroll sheet and make the necessary entry to record the paymen
ID: 2573922 • Letter: #
Question
(a) Complete the payroll sheet and make the necessary entry to record the payment of the payroll
(b) Make the entry to record the payroll tax expenses of Otis Import Company.
Below is a payroll sheet for Otis Import Company for the month of September 2017. The company is allowed a 5.40% unemployment compensation rate by the state; the federal unemployment tax rate is 0.60% and the maximum for both is $9,000 . Assume a 12% federal income tax rate for all employees and a 7.65% FICA tax on employee and employer on a maximum of $118,500 . In addition, 1.45% is charged both employer and employee for an employee’s wages in excess of $118,500 per employee. Name Earnings toAug 31 September
Earnings Income Tax
Withholding F.I.C.A. State
U.C. Federal
U.C. B.D. Williams $8,600 $900 D. Raye 8,100 750 K. Baker 9,800 1,200 F. Lopez 13,600 1,800 A. Daniels 109,000 12,600 B. Kingston 113,000 18,000
Explanation / Answer
Name Earnings to September Total earnings Income Tax F.I.C.A. State Federal 31-Aug Earnings E Withholding 12%*E 7.65%*E U.C. U.C. B.D. Williams $8,600 $900 $9,500 $108.00 $68.85 21.6 2.4 D. Raye 8,100 750 $8,850 $90.00 $57.38 40.5 4.5 K. Baker 9,800 1,200 $11,000 $144.00 $91.80 0 0 F. Lopez 13,600 1,800 $15,400 $216.00 $137.70 0 0 A. Daniels 109,000 12,600 $121,600 $1,512.00 $695.70 0 0 B. Kingston 113,000 18,000 $131,000 $2,160.00 $558.00 0 0 Total $35,250 $4,230.00 $1,609.43 $62.10 $6.90 Social security Social security Taxes Medicare taxes Medicare taxes Total A. Daniels (118500-109000)*5.4% 513 12600*1.45% 182.7 695.7 B. Kingston (118500-113000)*5.4% 297 18000*1.45% 261 558 Accounts Title Dr Cr a) Salaries expenses $35,250 Income tax payable $4,230.00 FICA Taxes payable $1,609.43 Cash $29,410.58 b) Payroll Tax expenses $1,678.43 FICA taxes payable $1,609.43 State Unemployment taxes payable $62.10 Federal Unemployment taxes payable $6.90 c) Income tax payable $4,230.00 FICA taxes payable $3,218.85 State Unemployment taxes payable $62.10 Federal Unemployment taxes payable $6.90 Cash $7,517.85
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