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Journal entries for Payroll and Payroll Tax

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.

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

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.

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