Question

Hardware Company's payroll for N 2017 is summarized below. Unemployment Tax FICA State $40,600 4,200 $40,600 $128,300 $128,300 34,500 34,500 37,100 37,100 Sales 4,200 Total $19,90190,8004,00 $44,800 44,800 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%. FICA rate is 7.65% on an employee's wages to $118,500 and 1.45% in excess of $118,500. Of the $199,90 vages subject to FICA tax, $21,100 of the sales wage in excess of $118,500, Federal unemployment tax rate is 0.8% after credits. Income tax withheld amounts to $16,300 for factory, $7,200 for sales, and $6,200 for Total FICA Taxes FUTA Taxes SUTA Taxes Total Cost the journal entries to and administrat 8088

Answer 1

Solution - Calculation of total cost

	Factory	Sales	Administrative	Total
Salary and wages	$128300	$34500	$37100	$199900
FICA tax	$9815 ($128300*7.65%)	$1331 ($21100*1.45%) + [($34500-$21100)*7.65%]	$2838 ($37100*7.65%)	$13984
FUTA tax	$325 ($40600*0.8%)	$34 ($4200*0.8%)	0	$359
SUTA tax	$1015 ($40600*2.5%)	$105 ($4200*2.5%)	0	$1120
Total cost	$139455	$35970	$39938	$215363

Solution - Journal Entry

Account title and explanation	Debit	Credit
Factory Payroll
Wages and salary Expenses	$128300
FICA tax payable		$9815
Withholding Tax payable		$16300
Cash		$102185
(to record salary and wage expenses)
Payroll Tax expenses	$11155
FICA tax payable		$9815
FUTA tax payable		$325
SUTA tax payable		$1015
(To record payroll tax expenses)
Sales Payroll
Wages and salary expenses	$34500
FICA tax payable		$1331
Withholding tax payable		$7200
Cash		$25969
(to record salary and wages expenses)
Payroll tax expenses	$1470
FICA tax payable		$1331
FUTA tax payable		$34
SUTA tax payable		$105
(to record payroll tax expenses)
Administrative payroll
Wages and salary expenses	$37100
FICA tax payable		$2838
Withholding tax payable		$6200
Cash		$28062
(to record salary and wages expenses)
Payroll tax expenses	$2838
FICA tax payable		$2838
(To record payroll expenses)