Question

E13-7 (L01) (Payroll Tax Entries) Green Day Hardware Company's payroll for November 2017 is summarized below. Payroll Factory Sales Administrative Total Wages Due $120,000 32,000 36,000 $188,000 Amount Subject to Payroll Taxes Unemployment Tax FICA Federal State $120,000 $40,000 $40,000 32,000 4,000 36,000 $188,000 $44,000 $44,000 4,000 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 $188,000 wages subject to FICA tax, $20,000 of the sales wages is in excess of $118,500. Federal unemployment tax rate is 0.8% after credits. Income tax withheld amounts to $16,000 for factory, $7,000 for sales, and $6,000 for administrative. Instructions (a) Prepare a schedule showing the employer's total cost of wages for November by function. (Round all computations to nearest dollar.) (b) Prepare the journal entries to record the factory, sales, and administrative payrolls including the employer's payroll taxes.

Can you help me with (b)

Answer 1

The following journal entries will be prepared to record the factory payroll and related employer's payroll taxes:
Account titles and Explanation	Debit	Credit
Salaries and wages expense	120000
Withholding tax payable		16000
FICA taxes payable		9180
Cash		94820
Account titles and Explanation	Debit	Credit
Payroll tax expense	10500
FICA taxes payable		9180
Federal Unemployment tax payable		320
State unemployment tax payable		1000
The following journal entries will be prepared to record the sales payroll and related employer's payroll taxes:
Account titles and Explanation	Debit	Credit
Salaries and wages expense	32000
Withholding tax payable		7000
FICA taxes payable		918
Cash		24082
Account titles and Explanation	Debit	Credit
Payroll tax expense	1050
FICA taxes payable		918
Federal Unemployment tax payable		32
State unemployment tax payable		100
The following journal entries will be prepared to record the administrative payroll and related employer's payroll taxes:
Account titles and Explanation	Debit	Credit
Salaries and wages expense	36000
Withholding tax payable		6000
FICA taxes payable		2754
Cash		27246
Account titles and Explanation	Debit	Credit
Payroll tax expense	2754
FICA taxes payable		2754