Payroll entries. Total payroll of Walnut Co. was $1,840,000, of which $320,000 r

Question

Payroll entries.
Total payroll of Walnut Co. was $1,840,000, of which $320,000 represented amounts
paid in excess of $1018,500 to certain employees. The amount paid to employees in
excess of $7,000 was $1,440,000. Income taxes withheld were $450,000. 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 $106,800 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.

Explanation / Answer

Hi,

Please find the detailed answer as follows:

Part A:

Salaries and Wages Expense Dr. 1840000

Withholding Taxes Payable Cr. 450000

FICA Taxes Payable Cr. 120920

Cash Cr. 1269080

---------

Part B:

Payroll Tax Expense Dr. 128920

FICA Taxes Payable Cr. 120920

FUTA Taxes Payable Cr. 3200

SUTA Taxes Payable Cr. ($400,000

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