Payroll of Yellow Card Company

Payroll of Yellow Card Company - The payroll of YellowCard...

Info icon This preview shows pages 1–2. Sign up to view the full content.

The payroll of YellowCard Company for September 2006 is as follows. Total payroll was $480,000, of which $110,000 is exempt fro mSocial Security tax because it represented amounts paid in excess of $90,000 to certain employees. The amount paid to employees in excess of $7,000 was $400,000/ Omcp,e taxes om tje a,pimt pf $80,000 were withheld, as was $9,000 in union dues. The state unemployment tax is 3.5%, but YellowCard Company is allowed a credit of 2.3% by the state for it's unemployment experience. Also, assume that the current FICA tax is 7.65% on an employees wages to $90,000 and 1.45% in excess of $90,000. No employee for YellowCard makes more than $125,000. The federal unemployment tax rate is 0.8% after state credit. Instructions: Prepare the necessary journal entries if the wages and salaries paid and the employer payroll taxes are recorde
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Wages and Salaries Expense 480,000 Withholding Taxes Payable 80,000 FICA Taxes Payable* 29,900 Union Dues Payable 9,000 Cash 361,100 *[($480,000 - $110,000) X 7.65% = $28,305 $110,000 is exempt so we do not $110,000 X 1.45% = $1,595; $28,305 + $1,595 = $29,900 On the excess amount we pay tax Payroll Tax Expense 31,500 FICA Taxes Payable 29,900 (As calculated above) Federal Unemployment Tax Payable 640 FUTA is payable till 7,000 and so [($480,000 - $400,000) X .8%) State Unemployment Tax Payable 960 [$80,000 X (3.5% - 2.3%)] There is a credit of 2.3% and the a ed separately. Remit in excel t calculate the FICA tax on that x at 1.45% we subtract 400,000 which is for employees above 7,000 amount is 480,000-400,000=80,000 as written above for FUTA...
View Full Document

  • Spring '09
  • WilliamWhitley
  • Accounting, Federal Insurance Contributions Act tax, FUTA, YellowCard Company

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern