The payroll of Teal Company for September 2016 is as follows. Total payroll was $446000 of...

The payroll of Teal Company for September 2016 is as follows.

Total payroll was $446000 of which $106000 is exempt from social security tax because is represented amounts paid in excess of $118500 to certain employees. The amount paid to employees in excess of $7000 was $400000. Income taxes in the amount of $78700 were withheld as was $8900 in union dues. The state unemployement tax is 3.5% but Teal Company is allowed a credit of 2.3% by the state for its unemployement 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 seperately.

Solutions

Expert Solution

a
Salaries and Wages Expense	446000
Withholding income taxes payable		78700
FICA taxes payable		27547	=(446000-106000)7.65%+(1060001.45%)
Union dues Payable		8900
Cash		330853

b
Payroll Tax Expense	28467
FICA Taxes Payable		27547
Federal Unemployment tax payable		368	=(446000-400000)*0.8%
State Unemployment tax payable		552	=(446000-400000)*(3.5%-2.3%)

ekkarill92 answered 2 years ago

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