Accounting - Solution a Schedule showing the employer's...

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E13-9 Allison Hardware Company's payroll for November 2010 is summarized below. Amount Subject to Payroll Taxes Unemployment Ta Payroll Wages Due F.I.C.A Federal Factory $140,000 $140,000 $40,000 Sales 32,000 32,000 4,000 Administrative 36,000 36,000 ----- Total $208,000 $208,000 $44,000 At this point in the year some emplyees have already received wages in excess of those to which pa taxes apply. Assume that the state unemployment tax is 2.5%. The F.I.C.A. rate is 7.65% on an emp wages to $102,000 and 1.45% in excess of $102,000. Of the $208,000 wages subject to F.I.C.A. tax of the sales wages is in excess of $102,000. Federal unemployment tax rate is 0.8% after credits. In tax withheld amounts to $16,000 for factory, $7,000 for sales, and $6,000 for administrative. Instructions a. Prepare a schedule showing the employer's total cost of wages for November by function. b. Prepare the journal entries to record the factory, sales, and administrative payrolls including the e
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ax State $40,000 4,000 ----- $44,000 ayroll ployee's x, $20,000 ncome employer's payroll taxes.
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Unformatted text preview: Solution a) Schedule showing the employer's total cost of wages for November by function: Wages for FICA FUT Wages FUT & SUT 7.65% 1.45% 0.80% Factory 140,000 40,000 10,710 - 320 Sales 32,000 4,000 918 290 32 Administrative 36,000 - 2,754 - - b) i) Factoty Payroll: Factory Wages and Salaries Expense 140,000 FIT Withheld 16,000 FICA Taxes Payable 10,710 Cash 113,290 Payroll Tax Expense 12,030 FICA Taxes Payable 10,710 Federal Unemployment Tax Payable 320 State Unemployment Tax Payable 1,000 ii) Sales Payroll: Sales Wages and Salaries Expense 32,000 FIT Withheld 7,000 FICA Taxes Payable 1,208 Cash 23,792 Payroll Tax Expense 1,340 FICA Taxes Payable 1,208 Federal Unemployment Tax Payable 32 State Unemployment Tax Payable 100 iii) Administrative Payroll: Administrative Wages and Salaries Expense 36,000 FIT Withheld 6,000 FICA Taxes Payable 2,754 Cash 27,246 Payroll Tax Expense 2,754 FICA Taxes Payable 2,754 SUT Total 2.50% 1,000 152,030 100 33,340 - 38,754 224,124...
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This note was uploaded on 10/03/2011 for the course ACCOUNTING 103 taught by Professor Ngo during the Spring '11 term at Berkeley.

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Accounting - Solution a Schedule showing the employer's...

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