Question

Stadium Manufacturing has the following data available for its September 30, 2011, payroll:

Wages earned $315,000

Income Taxes withheld 79,900

Wages earned are subject to Social Security and Medicare matching and withholding of 6.2 percent and 1.45 percent.

Federal unemployment taxes of 0.80 percent and state unemployment taxes of 1.20 percent are payable on $295,312.50 of the wages earned.

Compute the amounts of taxes payable and the amount of wages that will be paid to employees. Then prepare the journal entries to record the wages earned and the payroll taxes. (Round to the nearest penny)

Answer 1

Gross Pay		$ 315,000.00
Withholding Deductions
Employee Income Tax	$    79,900.00
Employee Social Security Tax	$    19,530.00
Employee Medicare Tax	$      4,567.50
Total Withholding Deductions		$ 103,997.50
Amount Payable		$ 211,002.50

Account Titles	Debit	Credit
Wages Expense	$ 315,000.00
Income Tax Payable		$   79,900.00
Social Security Tax Payable		$   19,530.00
Medicare Tax Payable		$      4,567.50
Wages Payable		$ 211,002.50