ACCOUTING PRIN SET LL INCLUSIVE
ACCOUTING PRIN SET LL INCLUSIVE
14th Edition
ISBN: 9781119815327
Author: Weygandt
Publisher: WILEY
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Chapter 11, Problem 3bDIE
To determine

Payroll Tax: The tax paid on the total earnings of employee is called payroll tax expense. Employer needs to calculate the payroll tax expense on the basis of gross earnings of the employee and deposit the total amount to respective authorities.

Federal Insurance Contributions Act (FICA) Tax: It is a tax applicable on employees’ earnings as a certain percentage. Employers are also supposed to contribute their share and deposit the combined amount to the federal body.

Federal Unemployment Tax Act (FUTA): This is applicable on employers only. It’s a feature of federal social security program. The employees who lost their employment due to any reason other than their own fault are benefitted from this program.

State Unemployment Tax Act (SUTA): It is same as federal unemployment tax act, only difference is that it is a program by states. The employees who lost their employment due to any reason other than their own fault are benefitted from this program.

Journal Entries: Entries to record the financial transactions during each accounting period are called journal entries. Income, liabilities and the giver are credited if the balance is increased and debited if the balance is reduced Expenses, assets and the receiver are debited if the balance is increased and credited if the balance is reduced in a journal entry.

To record: The employer’s payroll taxes.

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