- Unemployment Tax
- Payroll Wages Due FICA Federal State
- Factory $120,000 $120,000 $40,000 $40,000
- Sales 44,000 32,000 4,000 4,000
- Admin 36,000 36,000
- Total $200,000 $188,000 $44,000 $44,000
At this point in the year some employees have already received wages in excess of those to which payroll taxes apply. Assume that the state unemployment tax is 2.5%. The FICA rate is 7.65% on an employee's wages to $97,500 and 4.45% in excess of $97,500. Of the $188,000 wages subject to FICA tax, $20,000 is in excess of $97,500 related to the sales wages. Federal unemployment tax rate is .8% after credits. Income tax withheld amounts to $16,000 for factory, $7,000 for sales and $6,000 for administrative.
Instructions
a.) Prepare a schedule showing the employers total cost of wages for November by function.
b.) Prepare journal entries to record the factory, sales, and administrative payrolls including the employers payroll taxes.