Payroll entries
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Please explain how to prepare the journal entries.
Payroll Entries
Total payroll of Bennett Co. was $920,000, of which $160,000 represented amounts paid in excess of $90,000 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 $90,000 and 1.45% in excess of $90,000.
Instructions:
(a) Prepare the journal entry for the wages and salaries paid.
(b) Prepare the entry to record the employer payroll taxes.
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Solution Summary
The solution explains the payroll entries and the payroll tax.
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(a) Prepare the journal entry for the wages and salaries paid.
The total salaries and wages expense is $920,000. The withholdings are
Income tax 225,000
FICA tax is 7.65% till 90,000 so this amount is (920,000-160,000) ...
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