Pay roll entries. Total payroll of Walnut Co. was $2,760,000, of which $480,000 represented amounts paid...

Pay roll entries. Total payroll of Walnut Co. was $2,760,000, of which $480,000 represented amounts paid in excess of $118,500 to certain employees. The amount paid to employees in excess of $7,000 was $2,160,000. Income taxes withheld were $675,000. The state unemployment tax is 1.2%, the federal unemployment tax is .8%, and the F.I.C.A. tax is 7.65% on an employee's salaries and wages to $118,500 and 1.45% in excess of $118,500. Instructions

(a) Prepare the journal entry for the salaries and wages paid.

(b) Prepare the entry to record the employer payroll taxes.

Expert Solution

Salaries and Wages Expense	2760000
Withholding Taxes Payable		675000
FICA Taxes Payable		181380	=(2760000-480000)7.65%+(4800001.45%)
Cash		1903620

Payroll Tax Expense	193380
FICA Taxes Payable		181380
FUTA Taxes Payable		4800	=(2760000-2160000)*0.8%
SUTA Taxes Payable		7200	=(2760000-2160000)*1.2%

ekkarill92 answered 2 years ago

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