Textbook Problem

Payroll Accounting

McLaughlin Manufacturing has the following data available for its March 31, 2019, payroll:

*All Subject to Social Security and Medicare matching and withholding at 6.2% and 1.45%, re9eetivety.

Federal unemployment taxes of 0.50% and state unemployment taxes of 0.80% are payable on the first $1,000,000.

Required:

1. Compute the taxes payable and wages that will be paid to employees. Then prepare the journal entries to record the wages earned and the payroll taxes. ( Note: Round to the nearest penny)

2. CONCEPTUAL CONNECTION McLaughlin Manufacturing would like to hire a new employee at a salary of $80,000. Assuming payroll taxes are as described above (with unemployment taxes paid on the first $7,000) and fringe benefits (e.g., health insurance, retirement, etc.) are 28% of gross pay, what will be the total cost of this employee for McLaughlin?