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Total payroll for a month was $960,000, of which $230,000 is exempt from Social Security tax because it represented amounts paid in excess of...
Total payroll for a month was $960,000, of which $230,000 is exempt from Social Security tax because it represented amounts paid in excess of $102,000 to certain employees. The amount paid to employees in excess of $7,000 was $860,000. Income taxes in the amount of $180,000 were withheld, as was $18,000 in union dues. The state unemployment tax is 3.5%, but Abby's Art Supplies is allowed a credit of 2.3% by the state for its unemployment experience. Also, assume that the current FICA tax is 7.65% on employee's wages to $102,000 and 1.45% in excess of $102,000. No employee at Abby's makes more than $250,000. 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 (Show all of your works including any calculations).
