In: Accounting
E13-6 (L01) (Payroll Tax Entries) The payroll of YellowCard
Company for September 2016 is as follows.
Total payroll was $480,000, of which $110,000 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
$80,000 were withheld, as was $9,000 in union dues. The state
unemployment tax is 3.5%, but YellowCard 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
YellowCard makes more than $125,000. The
federal unemployment tax rate is 0.8% after state credit.
Instructions Please show work
Calculate the amounts for a liability for 2016 and 2017 fro compensated absences.