Recording Payroll and Payroll TaxesThe following data are taken from Stockton Wholesale Company’s May payroll: Administrative salaries$50,000Sales salaries51,000Custodial salaries7,000Total payroll$108,000Salaries subject to 1.45 percent Medicare tax$108,000Salaries subject to 6.2 percent Social Security tax85,000Salaries subject to federal unemployment taxes14,000Salaries subject to state unemployment taxes21,000Federal income taxes withheld from all salaries17,800Assume that the company is subject to a two percent state unemployment tax (due to a favorable experience rating) and a 0.6 percent federal unemployment tax.c. Accrual of employer’s payroll taxes. (Assume that the FICA matches the amount withheld.)d. Payment of these payroll-related liabilities. (Assume that all are settled at the same time.)Round your answers to the nearest dollar.

Answered: ecording Payroll and Payroll Taxes The…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter9: Current Liabilities And Contingent Obligations

Section: Chapter Questions

Problem 14E

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Recording Payroll and Payroll Taxes
The following data are taken from Stockton Wholesale Company’s May payroll:

Administrative salaries	$50,000
Sales salaries	51,000
Custodial salaries	7,000
Total payroll	$108,000
Salaries subject to 1.45 percent Medicare tax	$108,000
Salaries subject to 6.2 percent Social Security tax	85,000
Salaries subject to federal unemployment taxes	14,000
Salaries subject to state unemployment taxes	21,000
Federal income taxes withheld from all salaries	17,800

Assume that the company is subject to a two percent state unemployment tax (due to a favorable experience rating) and a 0.6 percent federal unemployment tax.

c. Accrual of employer’s payroll taxes. (Assume that the FICA matches the amount withheld.)
d. Payment of these payroll-related liabilities. (Assume that all are settled at the same time.)

Round your answers to the nearest dollar.

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