Question

The following information about the payroll for the week ended October 4 was obtained from the records of Simkins Mining Co.:

Please help answer in excel format, using double underlines etc- I am losing grade points for not having the correct input in columns. Thank you in advance.

P8-2 Recording payroll and payroll taxes The following information about the payroll for the week ended October 4 was obtained from the records of Simkins Mining Co Salaries: Deductions: Sales salaries Employee Wages Office salaries $30,000 40,000 20,000 $90,000 Income tax withheld U.S. savings bonds Group insurance $17,000 2,000 6,000 Tax rates assumed: FICA tax, 7.5% of employee annual earnings State unemployment (employer only), 4.2% Federal unemployment (employer only), 0.8% Instructions 1. For the October 4 payroll, determine the employee FICA tax payable. 2. Illustrate the effect on the accounts and financial statements of recording the October 4 payroll 3. Determine the following amounts for the employer payroll taxes related to the October 4 payroll: (a) FICA tax payable, (b) state unemployment tax payable, and (c) federal u ployment tax payable Illustrate the effect on the accounts and financial statements of recording the liability for the October 4 employer payroll taxes 4.

Answer 1

Part 1

FICA taxes payable = 90000*7.5%= 6750

Part 2

Balance sheet

Assets	=	liabilities						+	stockholders equity
No effect		17000	2000	6000	6750	58250			(90000)

Statement of cash flows = no effect

Income statement

Sales Salaries	30000
Employee wages	40000
Office Salaries	20000

Part 3

A. Fica taxes payable = 6750

B. State unemployment taxes payable = 3780

C.federal unemployment taxes payable = 720

Part 4

	Assets	+	liabilities				+	stockholders equity
	No effect		FICA taxes payable	SUTA payable	futa payable			Retained earnings
	0		6750	3780	720			11250

Statement of cash flows = no effect = 0

Income statement = payroll tax expense = 11250