reviewact312sol[1]

reviewact312sol[1] - 225,000 FICA Taxes Payable 60,460 Cash...

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Total payroll of Watson Co. was $920,000, of which $160,000 represented amounts paid in excess of $100,000 to certain employees. The amount paid to employees in excess of $7,000 was $720,000. Income taxes withheld were $225,000. 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 wages to $100,000 and 1.45% in excess of $100,000. a) Prepare the journal entry for the wages and salaries paid. (b) Prepare the entry to record the employer payroll taxes (a) Wages and Salaries Expense ........................................................ 920,000 Withholding Taxes Payable .............................................
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Unformatted text preview: 225,000 FICA Taxes Payable. ....................................................... 60,460* Cash. ................................................................................. 634,540 * [($920,000 – $160,000) × 7.65%] + ($160,000 × 1.45%) (b) Payroll Tax Expense . ................................................................. 64,460 FICA Taxes Payable ($760,000 × 7.65%) + ($160,000 × 1.45%). .............. 60,460 Federal Unemployment Tax Payable [($920,000 – $720,000) × .8%] . ................................ 1,600 State Unemployment Tax Payable ($200,000 × 1.2%) . . 2,400...
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