Problem

According to a summary of the payroll of Zumwalt Co., $593,500 was subject to a 7.6% FICA tax. Also, $91,993 was subject to state and federal unemployment taxes.

Round your answers to the nearest cent.

a. Calculate the employer's payroll taxes, using the following rates: state unemployment, 4.4%; federal unemployment, 0.9%.

b. Illustrate the effects on the accounts and financial statements of recording the accrual of payroll taxes. If no account or activity is affected, select "No effect" from the dropdown list and leave the corresponding number entry box blank. Enter account decreases and cash outflows as negative amounts.