P13-4
(Payroll Tax Entries)
Below
is a payroll sheet for Otis Import Company for the month of September 2014. The
company is allowed a 1% unemployment compensation rate by the state; the
federal unemployment tax rate is 0.8% and the maximum for both is $7,000.
Assume a 10% federal income tax rate for all employees and a 7.65% FICA tax on
employee and employer on a maximum of $113,700. In addition, 1.45% is charged
both employer and employee for an employee's wages in excess of $113,700 per
employee.
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Unemployment Tax
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Name
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Earnings to Aug. 31
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September Earnings
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Income Tax Withholding1
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FICA
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State
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Federal
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B.D.
Williams
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$ 6,800
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$ 800
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D. Raye
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6,500
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700
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K. Baker
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7,600
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1,100
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F. Lopez
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13,600
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1,900
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A.
Daniels
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107,000
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13,000
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B.
Kingston
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112,000
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16,000
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Instructions
- (a)Complete the payroll sheet and make the necessary entry
to record the payment of the payroll.
- (b)Make the entry to record the payroll tax expenses of Otis
Import Company.
- (c)Make the entry to record the payment of the payroll
liabilities created. Assume that the company pays all payroll liabilities
at the end of each month.
TUTORIAL PREVIEW
(a)
Name |
Earnings to Aug. 31
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September Earnings
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Income Tax Withholding
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B. D. Williams
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$ 6,800
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$ 800
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$ 80
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$ 61.20
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$2.00*
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$1.60**
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File name: P13-4 Otis Import Company.docx File type: .docx PRICE: $8
