The September 2020 payroll of Keefer, Inc. was $818,000 of which $105,000 represented amounts paid in excess of $137,700 to certain employees.

The September 2020 payroll of Keefer, Inc. was $818,000 of which $105,000 represented amounts paid in excess of $137,700 to certain employees. The amount paid to employees in excess of $7,000 was $620,000. Income taxes withheld were $192,000, and union dues withheld were $12,000. The state unemployment tax is 1.2%, the federal unemployment tax is .8%.The state unemployment tax and federal unemployment tax are both calculated on the first $7,000 of employee wages.

A. Prepare the journal entry for the wages & salaries paid.

B. Prepare the journal entry to record the employer payroll taxes.

Solutions

Expert Solution

Payroll journal entry:

FICA Taxes is are paid for first $137,700 of salary for each employee. Hence FICA will be calculated for $713,000 ($818,000 - $105,000).

Calculation of Net pay would be as follows:

Following Journal entries will be passed for payroll:

Note: FUTA and SUTA are to be calculated in the first $7,000 of wages. Hence the amount used for calculation would be $198,000 ($818,000 - $620,000).

ekkarill92 answered 1 year ago

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