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    Payroll Tax Entries

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    I need to double check my answers with a professional. Thank you. Please see attached.
    Allison Hardware Company's payroll for November 2010 is summarized below.

    Amount Subject to Payroll Taxes
    Unemployment Tax
    Payroll Wages Due F.I.C.A Federal State
    Factory $140,000 $140,000 $40,000 $40,000
    Sales 32,000 32,000 4,000 4,000
    Administrative 36,000 36,000 ----- -----
    Total $208,000 $208,000 $44,000 $44,000

    At this point in the year some emplyees have already received wages in excess of those to which payroll
    taxes apply. Assume that the state unemployment tax is 2.5%. The F.I.C.A. rate is 7.65% on an employee's
    wages to $102,000 and 1.45% in excess of $102,000. Of the $208,000 wages subject to F.I.C.A. tax, $20,000
    of the sales wages is in excess of $102,000. Federal unemployment tax rate is 0.8% after credits. Income
    tax withheld amounts to $16,000 for factory, $7,000 for sales, and $6,000 for administrative.


    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 employer's payroll taxes.

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    Solution Summary

    The solution explains how to calculate the record payroll tax entries