Question

Daktari Enterprises’ Schedule of Earnings and Payroll Taxes for April is as follows:

	Gross	FICA	FUTA	SUTA	Total
	Earnings	8%	1%	4%	Taxes
Non-Factory Employees:
Sales	$ 10,000	$   800	$  100	$  400	$ 1,300
Administrative	7,000	560	70	280	910
	17,000	1,360	170	680	2,210
Factory Employees:
Direct Labor:
Regular	80,000	6,400	800	3,200	10,400
Overtime Premium	5,000	400	50	200	650
Indirect Labor	30,000	2,400	300	1,200	3,900
	115,000	9,200	1,150	4,600	14,950
Total	$132,000	$10,560	$1,320	$5,280	$17,160

Assuming overhead is a result of the random scheduling of jobs, the entry to record and distribute the employer’s payroll taxes would include:

	a.	A debit to Work in Process for $11,050.
	b.	A debit to Factory Overhead for $14,950.
	c.	A credit to Payroll of $132,000.
	d.	A debit to FICA Expense of $10,560.

Answer 1

Entry to record and distribute the employer’s payroll taxes would include:-

d. A debit to FICA Expense of $10,560.

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