Payroll Accounting: Ryan Company
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Ryan Company paid salaries for the month of June 2020, amounting to $120,000. Of this amount, $30,000 was received by employees who had already been paid the $128,400 maximum amount of annual earnings taxable in one year under FICA laws. Of the $120,000, $14,000 was paid to employees who had already reached the $7,000 maximum wages subject to unemployment taxes (rates: 5.4 % state and 0.6 % federal). Withholding taxes amounted to $36,000, and $1,450 was withheld for investment in company stock per an agreement with certain employees.
Provide entries to record the following:
Salary payment and the liabilities for the payroll deductions.
Employer payroll expenses.
Remittance of the taxes.
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Solution Summary
The Solution using Ryan Company as an example of salary payments, payroll expenses and tax remittance. See excel for schedule. Click into cells to see the formulas.
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