Exercise - Ayayai Hardware Company's payroll for November 2017 is summarized below:
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Amount Subject to Payroll Taxes
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Unemployment Tax
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Payroll
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Wages Due
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FICA
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Federal
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State
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Factory
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$126,600
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$126,600
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$40,500
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$40,500
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Sales
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28,800
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28,800
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4,200
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4,200
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Administrative
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38,900
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38,900
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Total
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$194,300
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$194,300
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$44,700
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$44,700
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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 $194,300 wages subject to FICA tax, $21,300 of the sales wages is in excess of $118,500. Federal unemployment tax rate is 0.8% after credits. Income tax withheld amounts to $16,800 for factory, $7,700 for sales, and $6,800 for administrative.
Prepare a schedule showing the employer's total cost of wages for November by function.
Prepare the journal entries to record the factory, sales, and administrative payrolls including the employer's payroll taxes.