Question

xercise 13-6 The payroll of Swifty Company for September 2016 is as follows. Total payroll was $446,000, of which $106,000 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 $78,700 were withheld, as was $8,900 in union dues. The state unemployment tax is 3.5%, but Swifty 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 1.45% in excess of $118,500. No employee for Swifty makes more than $125,000. The federal unemployment tax rate is 0.8% after state credit. Prepare the necessary journal entries if the wages and salaries paid and the employer payroll taxes are recorded separately. (Round answers to 0 decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts .Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit (To record wages and salaries paid) (To record employer payroll taxes) Click if you would like to Show Work for this question: Open Show Work SHOW LIST OF ACCOUNTS LINK TO TEXT Question Attempts: 0 of 10 used SAVE FOR LATER SUBMIT ANSWER

Exercise 13-6 The payroll of Swifty Company for September 2016 is as follows. Total payroll was $446,000, of which $106,000 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 $78,700 were withheld, as was $8,900 in union dues. The state unemployment tax is 3.5%, but Swifty 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 1.45% in excess of $118,500. No employee for Swifty makes more than $125,000. The federal unemployment tax rate is 0.8% after state credit. Prepare the necessary journal entries if the wages and salaries paid and the employer payroll taxes are recorded separately. (Round answers to O decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter o for the amounts .Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit (To record wages and salaries paid)

Answer 1

Credit Debit 446,000 Account title and explanation Salaries and Wage Expense Federal Income Taxes Payable FICA Taxes Payable Union Dues Payable Cash 78,700 27,547 8.900 330,853 28,467 27.547 Payroll Tax Expense FICA Taxes Payable Federal Unemployment Tax payable State Unemployment Tax payable 552 Note: FICA taxes payable = (446000-106000)*7.65% +(106000*1.45%) =27,547 Federal unemployment tax payable = (446,000-400,000)*0.8% State unemployment tax payable = (446,000-400,000)*(3.5%-2.3%)