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Problem

The payroll of YellowCard Company for September 2016 is as follows.

Total payroll was $480,000, of which si10,000 is exempt from Social Security tax because it represented amounts paid in excess of $118,500 to certain employees. The amount paid to employees in excess of $7,000 was $400,000. Income taxes in the amount of $80,000 were withheld, as was $9,000 in union dues. The state unemployment tax is 3.5%, but YellowCard Company is allowed a credit of 2.3% by the state for its unemployment experience. Also, assume that the current FICA tax is 7.65% on an employee's wages to $118,500 and 1A5% in excess of $118500. No employee for YellowCard makes more than $125,000. The federal unemployment tax rate is 0.8% after state credit.

Instructions

Prepare the necessary journal entries if the wages and salaries paid and the employer payroll taxes are recorded separately.

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M92797086

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