Question

McLoyd Company completed the salaries and wages payroll for March. The payroll provided the following details: Salaries and wages $410,000 earned Employee income taxes withheld 37,925 FICA taxes withheld 29,315 2,850 Unemployment taxes Required: 1. Considering both employee and employer payroll taxes, use the preceding information to calculate the total labor cost for the company for March 2, & 3. Prepare the journal entry to record the payroll for March, including employee deductions (but excluding employer payroll taxes) and record employer's FICA taxes and unemployment taxes. Employees were paid in March but amounts withheld were not yet remitted. Complete this question by entering your answers in the tabs below. Req 2 and 3 Req 1 Considering both employee and employer payroll taxes, use the preceding information to calculate the total labor cost for the company for March. Total Labor Cost Req 1 Req 2 and 3>

Answer 1

Ans.1: Total Labor Cost for the Month of March:

$

Salaries and Wages 410000

  Employer's Contribution to FICA Tax 29315

Unemployment Tax 2850

  Total Labor Cost for the Company 442165

Ans. 2: Journal Entries

i. Salaries and Wages A/c Dr. $41000

To Withheld Income Tax $37925

To FICA Payable $29315

   To Salaries and Wages Payable $342760

(Being Salaries and Wages payable to the Workers accounted for).

ii. Salaries and Wages Payable A/c Dr. $342760

To Bank A/c $342760

(Being Salaries and Wages for the month paid)

iii. Employer's FICA Contribution A/c Dr. $37925

To FICA Payable $37925

(Being Employer's contribution to FICA accounted for)

iv. Unemployment Tax A//c Dr. $2850

To Unemployment Tax Payable $2850

(Being unemployment tax payable by the Employer accounted for)