21) An employer must always use a calendar year for payroll purposes.

 

22) The balance in the Wages and Salaries Expense account is equal to net pay.

 

23) The payroll tax expense is recorded at the same time the payroll is recorded.

 

24) There is no limit on the amount of taxes paid for SUTA.

 

25) FIT Payable has a credit normal balance.

 

26) FICA taxes are levied only on employees.

27) Using the information below, determine the amount of the payroll tax expense for B. Harper Company’s first payroll of the year. In your answer list the amounts for FICA (OASDI and Medicare), SUTA, and FUTA.

 

EmployeeTaxable Earnings

K. Addington$550

K. Wilcox400

T. Sharma320

 

Assume:

FICA tax rates are: OASDI 6.2% on a limit of $106,800 and Medicare 1.45%

State Unemployment tax rate is 5.0% on the first $7,000

Federal Unemployment tax rate is 0.8% on the first $7,000

 

28) Using the information provided below, prepare a journal entry to record the payroll tax expense for Mr. B’s Carpentry.

 

EmployeeGross PayCumulative Earnings

Prior to this Payroll

V. Vaughn$1,600$44,000

C. Jefferson1,2007,000

B. Hogan1,400120,000

 

Assume:

FICA tax rates are: OASDI 6.2% on a limit of $106,800 and Medicare 1.45%

State unemployment tax rate is 2% on the first $7,000

Federal unemployment tax rate is 0.8% on the first $7,000.

29) Sweetman’s Recording Studio payroll records show the following information:

 

Cumulative EarningsWeekly

Before PayrollSalary

D. Gordon$20,000950

 

Assume the following:

a) FICA: OASDI, 6.2% on a limit of $106,800; Medicare, 1.45%

b) Each employee contributes $40 per week for union dues

c) State income tax is 5% of gross pay

d) Federal income tax is 20% of gross pay

 

Prepare a general journal payroll entry.

 

 

 



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *