The following is a payroll sheet for Otis Imports for the month of September 2020. 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 $128,400. In addition, 1.45% is charged both employer and employee for an employee’s wages in excess of $128,400 per employee.Name Earningsto Aug. 31 SeptemberEarnings IncomeTaxWithholding FICA Unemployment TaxStateFederalB.D. Williams$ 6,800$ 800D. Raye6,500700K. Baker7,6001,100F. Lopez13,6001,900A. Daniels116,90013,000B. Kingston121,90016,000Instructionsa. 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 Imports.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.
The following is a payroll sheet for Otis Imports for the month of September 2020. The company is allowed a 1%
Name
Earnings
to Aug. 31
September
Earnings
Income
Tax
Withholding
FICA
Unemployment Tax
State
Federal
B.D. Williams
$ 6,800
$ 800
D. Raye
6,500
700
K. Baker
7,600
1,100
F. Lopez
13,600
1,900
A. Daniels
116,900
13,000
B. Kingston
121,900
16,000
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 Imports.
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.
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