The payroll of Concord Company for September 2016 is as follows. Total payroll w

Question

The payroll of Concord Company for September 2016 is as follows.

Total payroll was $492,000, of which $102,000 is exempt from Social Security tax because it represented amounts paid in excess of $118,500 to certain employees. The amount paid to employees in excess of $7,000 was $400,000. Income taxes in the amount of $80,000 were withheld, as was $8,200 in union dues. The state unemployment tax is 3.5%, but Concord Company is allowed a credit of 2.3% by the state for its unemployment experience. Also, assume that the current FICA tax is 7.65% on an employee’s wages to $118,500 and 1.45% in excess of $118,500. No employee for Concord makes more than $125,000. The federal unemployment tax rate is 0.8% after state credit.

Prepare the necessary journal entries if the wages and salaries paid and the employer payroll taxes are recorded separately. (Round answers to 0 decimal places, e.g. 5,275. 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 amount is entered. Do not indent manually.)

Account Titles and Explanation

Debit

Credit

(To record wages and salaries paid)

(To record employer payroll taxes)

Account Titles and Explanation

Debit

Credit

(To record wages and salaries paid)

(To record employer payroll taxes)

Explanation / Answer

Accounts title and explanation debit credit Wages and Salaries expense 492000 Withholding taxes payable 80000 FICA taxes payable (390000*7.65%)+(102000*1.45%) 31314 Union dues payable 8200 Cash (balancing figure) 372486 (to record Wages and Salaries paid) Payroll tax expenses 33154 FICA taxes payable 31314 Federal unemployment tax payable (492000-400000)*0.8% 736 State unemployment tax payable ((492000-400000)*(3.5%-2.3%)) 1104 (to record employer payroll taxes)

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.