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# 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.

#### Solution Preview

(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) ...

#### Solution Summary

The solution explains the payroll entries and the payroll tax.

\$2.19