has 6 employees who earned the following wages during this periods S 27,000 Bill

Question

has 6 employees who earned the following wages during this periods S 27,000 Bill 28,000 Total $317,000 The state unemployment tax rate is 5.4% and the federal unemployment tax rate is 0 $7,000 of wages per employee. The income tax of 7.65 percent were during the period (no employees reached social security maximums .6%, both onthe average 20% for each employee and FICA taxes a Prepare the journal entry to record Emily's obligation to employees in total for payroll (assume wages are still owed) b. Prepare the journal entry to record Emily's obligation for payroll tases.

Explanation / Answer

Sate unemployemnet tax rate for all the employees = 7000*5.4% = 378

Federal unemployment tax rate for all the employees = 7000*0.6% = 42. Total = 378+42 = 420. Thus total for 6 employees = 6*420 = 2520

Income tax withholdings for each employee:

Net amount of wages payable to employees = total gross amount - unemployment tax withheld - income tax withheld = 317,000 - 2,520 - 63,400

= $251,080

Journal entry:

b. Journal entry for Emily's obligation for payroll tax:

Name Amount Tax @ 20% Frank 27,000.00 5,400.00 Bill 18,000.00 3,600.00 Duff 108,000.00 21,600.00 Laura 28,000.00 5,600.00 Cindy 52,000.00 10,400.00 Melissa 84,000.00 16,800.00 Total 317,000.00 63,400.00

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