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The Effect of Taxes on Accounts and Financial Statements

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According to a summary of the payroll of Newman Publishing Co.,$600,000 was subject to the 7.5% FICA tax. Also,$50,000 was subject to state and federal unemployment taxes.

A. Calculate the employer's payroll taxes, using the following rates: state unemployment, 4.3%; federal unemployment, 0.8%

B. Illustrate the effects on the accounts and financial statements of recording the accrual of payroll taxes.

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Solution Summary

According to a summary of the payroll of Newman Publishing Co.,$600,000 was subject to the 7.5% FICA tax. Also,$50,000 was subject to state and federal unemployment taxes.

A. Calculate the employer's payroll taxes, using the following rates: state unemployment, 4.3%; federal unemployment, 0.8%

B. Illustrate the effects on the accounts and financial statements of recording the accrual of payroll taxes.

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