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    Journal entries for Payroll and Payroll Tax

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    The payroll of YellowCard Company for September 2006 is as follows.

    Total payroll was $480,000, of which $110,000 is exempt fro mSocial Security tax because it represented amounts paid in excess of $90,000 to certain employees. The amount paid to employees in excess of $7,000 was $400,000/ Omcp,e taxes om tje a,pimt pf $80,000 were withheld, as was $9,000 in union dues. The state unemployment tax is 3.5%, but YellowCard Company is allowed a credit of 2.3% by the state for it's unemployment experience. Also, assume that the current FICA tax is 7.65% on an employees wages to $90,000 and 1.45% in excess of $90,000. No employee for YellowCard makes more than $125,000. The federal unemployment tax rate is 0.8% after state credit.

    Prepare the necessary journal entries if the wages and salaries paid and the employer payroll taxes are recorded separately. Remit in excel

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    Solution Preview

    Please see the attached file

    Wages and Salaries Expense 480,000
    Withholding Taxes Payable 80,000
    FICA Taxes Payable* 29,900
    Union Dues Payable 9,000
    Cash 361,100
    *[($480,000 - ...

    Solution Summary

    The solution explains the journal entries for Payroll and Payroll Tax.