Question

					Amount Subject to Payroll Taxes
						Unemployment Tax
Payroll		Wages Due		FICA		Federal		State
Factory		$122,200		$122,200		$36,200		$36,200
Sales		33,500		33,500		3,900		3,900
Administrative		35,500		35,500		xxxx		xxxx
Total		$191,200		$191,200		$40,100		$40,100

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 $118,500 and 1.45% in excess of $118,500. Of the $191,200 wages subject to FICA tax, $21,600 of the sales wages is in excess of $118,500. Federal unemployment tax rate is 0.8% after credits. Income tax withheld amounts to $15,800 for factory, $7,000 for sales, and $6,100 for administrative.

A) Prepare a schedule showing the employer’s total cost of wages for November by function.
B)Prepare the journal entries to record the factory, sales, and administrative payrolls including the employer's payroll taxes. (For multiple debit/credit entries

Answer 1

b).Journal entries: SI.No. Particulars Debit (Ş) Credit(Ş) Factory Payroll: Wages & Salary a/c 122200 To Cash a/c To Withholding tax payable a/c To FICA Tax Payable 97052 15800 9348 a/c Payroll Tax Expense a/c Dr 10543 To FICA Tax Payable a/c To State To Federal 9348 905 290 Salary payroll: Wages & Salaries a/c Dr 33500 To Cash a/c To Withholding tax payable To FICA tax payable a/c 23937 7000 2563 d) Payroll Tax Expense a/c 2692 To FICA Tax Payable a/c To State To Federal 2563 98 31 Administrative Payroll: e) Wages & Salaries a/c Dr 33500 To Cash a/c To Withholding tax payable To FICA ax payable a/c 24684 6100 2716 Payroll Tax Expense a/c 2716 To FICA Tax Pavable a/c 2716

a.Statement showing the emplover's total cost of wages for November is as follows: Particulars Total Factory Sales Administrative Wages FICA Federal State Total 35500 2716 0 0 38216 191200 122200 33500 146279348 2563 31 290 905 207150 132743 36191 321 1003 98