Eclipse Company has the following payroll information for the week: $240,000 of Salaries and Wages Expense. None of the employees have reached the earnings limits for FICA, FUTA, or SUTA so all wages are subject to these taxes for employer payroll tax purposes. The following deductions were withheld from employees: Federal Income Tax: $36,300 State Income Tax: $8,200 FICA Taxes: $18,360 Union Dues: $2,800 United Funds: $1,700 The FUTA rate is 0.8% and the SUTA rate is 5.4% Prepare the journal entry to record the employer's payroll tax expense

Eclipse Company has the following payroll information for the week: $240,000 of Salaries and Wages Expense. None of the employees have reached the earnings limits for FICA, FUTA, or SUTA so all wages are subject to these taxes for employer payroll tax purposes. The following deductions were withheld from employees: Federal Income Tax: $36,300 State Income Tax: $8,200 FICA Taxes: $18,360 Union Dues: $2,800 United Funds: $1,700 The FUTA rate is 0.8% and the SUTA rate is 5.4% Prepare the journal entry to record the employer's payroll tax expense

College Accounting (Book Only): A Career Approach

12th Edition

ISBN:9781305084087

Author:Cathy J. Scott

Publisher:Cathy J. Scott

Chapter8: Employer Taxes, Payments, And Reports

Section: Chapter Questions

Problem 1E

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Payrex Co. has six employees. All are paid on a weekly basis. For the payroll period ending January 7, total employee earnings were 12,500, all of which were subject to SUTA, FUTA, Social Security, and Medicare taxes. The SUTA tax rate in Payrexs state is 5.4%, but Payrex qualifies for a rate of 2.0% because of its good record of providing regular employment to its employees. Other employer payroll taxes are at the rates described in the chapter. REQUIRED 1. Calculate Payrexs FUTA, SUTA, Social Security, and Medicare taxes for the week ended January 7. 2. Prepare the journal entry for Payrexs payroll taxes for the week ended January 7. 3. What amount of payroll taxes did Payrex save because of its good employment record?
On January 21, the column totals of the payroll register for Great Products Company showed that its sales employees had earned 14,960, its truck driver employees had earned 10,692, and its office employees had earned 8,670. Social Security taxes were withheld at an assumed rate of 6.2 percent, and Medicare taxes were withheld at an assumed rate of 1.45 percent. Other deductions consisted of federal income tax, 3,975, and union dues, 560. Determine the amount of Social Security and Medicare taxes withheld and record the general journal entry for the payroll, crediting Salaries Payable for the net pay. All earnings were taxable. Round amounts to the nearest penny.
On January 21, the column totals of the payroll register for Great Products Company showed that its sales employees had earned 14,960, its truck driver employees had earned 10,692, and its office employees had earned 8,670. Social Security taxes were withheld at an assumed rate of 6.2 percent, and Medicare taxes were withheld at an assumed rate of 1.45 percent. Other deductions consisted of federal income tax, 3,975, and union dues, 560. Determine the amount of Social Security and Medicare taxes withheld and record the general journal entry for the payroll, crediting Salaries Payable for the net pay. All earnings were taxable. Round amounts to the nearest penny.
For tax purposes, assume that the maximum taxable earnings are 118,500 for Social Security and 7,000 for the unemployment tax and that all earnings are taxable for Medicare. For the payroll register for the month of November for Shelby, Inc., determine the taxable earnings for each employee.
Davis, Inc. paid wages to its employees during the year as follows: a. How much of the total payroll is exempt from the FICA rate of 8%? b. How much of the total payroll is exempt from federal and state unemployment taxes? c. How much of the total payroll is exempt from federal income tax withholding?