Brief Exercise 148 Total payroll of Walnut Co. was $1,820,000, of which $320,000

Question

Brief Exercise 148 Total payroll of Walnut Co. was $1,820,000, of which $320,000 represented amounts paid in excess of $118,500 to certain employees. The amount paid to employees in excess of $7,000 was $1,360,000. Income taxes withheld were $475,000. The state unemployment tax is 1.2%, the federal unemployment tax is .8%, and the FI.C.A. tax is 7.65% on an employee's salaries and wages to $118,500 and 1.45% in excess of $118,500 Prepare the journal entry for the salaries and wages paid. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Salaries and Wages Expense Debit Credit 1,820,000 Withholding Taxes Payable FICA Taxes Payable Cash 475,000 SHOW LIST OF ACCOUNTS Prepare the entry to record the employer payroll taxes. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.) Account Titles and Explanation Debit Click if you would like to Show Work for this question: Open Show Work SHON LIST OF ACCOUNTS

Explanation / Answer

Salaries and Wages Expense 1820000           Withholding Taxes Payable 475000            FICA Taxes Payable 119390 =(1820000-320000)*7.65%+(320000*1.45%)            Cash 1225610 b Payroll Tax Expense 128590            FICA Taxes Payable 119390            FUTA Taxes Payable 3680 =(1820000-1360000)*0.8%            SUTA Taxes Payable 5520 =(1820000-1360000)*1.2%

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