Question

Green Day Hardware payroll for November 2020 is summarized below.

					Amount Subject to Payroll Taxes
						Unemployment Tax
Payroll		Wages Due		FICA		Federal		State
Factory		$120,000		$120,000		$40,000		$40,000
Sales		32,000		32,000		4,000		4,000
Administrative		36,000		36,000
Total		$188,000		$188,000		$44,000		$44,000

At this point in the year, some employees have already received wages in excess of those to which payroll taxes apply. Assume that the state unemployment tax is 2.5%. The FICA rate is 7.65% on an employee’s wages to $128,400 and 1.45% in excess of $128,400. Of the $188,000 wages subject to FICA tax, $20,000 of the sales wages is in excess of $128,400. Federal unemployment tax rate is 0.8% after credits. Income tax withheld amounts to $16,000 for factory, $7,000 for sales, and $6,000 for administrative.

(A ) Prepare a schedule showing the employer’s total cost of wages for November by function. (Round answers to 0 decimal places, e.g. 5,275.)

		Factory		Sales		Administrative		Total
Salaries and Wages		$		$		$		$
FICA Taxes
FUTA Taxes
SUTA Taxes
Total Cost		$		$		$		$

(B) Prepare the journal entries to record^.the factory, sales, and administrative payrolls including the employer’s payroll taxes. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when the amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,125.)

Answer 1

1.)		Factory	Sales	Administrative	Total
	Salaries and Wages	120,000	32,000	36,000	188,000
	FICA Taxes	9,180	1,208	2,754	13,142
	FUTA Taxes	320	32	-	352
	SUTA Taxes	1,000	100	-	1,100
	Total Cost	130,500	33,340	38,754	202,594
	Working Note:-
	1- Calculate the FICA, FUTA and SUTA taxes for factory wages as shown below:-
	FICA Taxes= $120,000*7.65%	9,180
	FUTA Taxes = $40,000*0.8%	320
	SUTA Taxes= $40,000*2.5%	1,000
	The total taxes for factory wages are $10,500
	2- Calculate the FICA, FUTA and SUTA taxes for Sales salaries as shown below:-
	FICA Taxes ($32,000-$20,000)*7.65%+($20,000*1.45%)	1,208
	FUTA Taxes ($4,000*0.8%)	32
	SUTA Taxes($4,000*2.5%)	100
	The total taxes for sales salaries are $1,340.
	3- Calculate the FICA, FUTA and SUTA taxes for administrative salaries as shown below:-
	FICA Taxes= $36,000*7.65%= $2,754
	There is no FUTA tax and SUTA tax on administrative salaries. Therefore, the total tax for administrative salaries is $2,502
2.)	Preparing the journal entries as shown below:-
	Account Titles and Explanation	Debit ($)	Credit ($)
	Factory Payroll:
	Wages and Salaries Expenses	120,000
	Withholding taxes payable		16,000
	FICA payable		9,180
	Wages and Salaries payable		94,820
	(To record salaries and wages expenses)
	Payroll Tax Expense	10,500
	FICA Payable		9,180
	FUTA Payable		320
	SUTA Payable		1,000
	(To record the payroll expense)
	Sales Payroll:
	Wages and Salaries Expense	32,000
	Withholding taxes payable		7,000
	FICA Payable		1,208
	Wages and Salaries payable		23,792
	(To record the salaries and wages expenses)
	Payroll Tax Expense	1,340
	FICA Payable		1,208
	FUTA Payable		32
	SUTA Payable		100			ekkarill92 Next > < Previous Related Solutions Pina Hardware Company’s payroll for November 2017 is summarized below. Amount Subject to Payroll Taxes Unemployment... Pina Hardware Company’s payroll for November 2017 is summarized below. Amount Subject to Payroll Taxes Unemployment Tax Payroll Wages Due FICA Federal State Factory $123,500 $123,500 $39,500 $39,500 Sales 30,800 30,800 4,000 4,000 Administrative 36,000 36,000    Total $190,300 $190,300 $43,500 $43,500 At this point in the year, some employees have already received wages in excess of those to which payroll taxes apply. Assume that the state unemployment tax is 2.5%. The FICA rate is 7.65% on an employee’s wages to... Stellar Hardware Company’s payroll for November 2017 is summarized below. Amount Subject to Payroll Taxes Unemployment... Stellar Hardware Company’s payroll for November 2017 is summarized below. 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