(Payroll Tax Entries) Green Day Hardware Company’s payroll for November 2017 is summarized below.

Payroll	Wages due	Amount subjected to payroll taxes
			Unemployment tax
		FICA	Federal	State
Factory	\(120,000	\)120,000	\(40,000	\)40,000
Sales	32,000	32,000	4,000	4,000
Administrative	36,000	36,000	-	-
Total	\(188,000	\)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 \(118,500 and 1.45% in excess of \)118,500. Of the \(188,000 wages subject to FICA tax, \)20,000 of the sales wages is in excess of \(118,500. Federal unemployment tax rate is 0.8% after credits. Income tax withheld amounts to \)16,000 for factory, \(7,000 for sales, and \)6,000 for administrative.

Instructions

(a) Prepare a schedule showing the employer’s total cost of wages for November by function. (Round all computations to nearest dollar.)

(b) Prepare the journal entries to record the factory, sales, and administrative payrolls including the employer’s payroll taxes.

Particular

Total

Factory

Sales

Administrative

Wages

$188,000

$120,000

$32,000

$36,000

FICA

13,142

9,180

1,208

2,754

Federal unemployment tax

352

320

32

0

State unemployment tax

1,100

1,000

100

0

Total cost

$202,594

$130,500

$33,340

$38,754

Particular

Amount $

Factory wages

$120,000

Social security (FICA)$(\mathrm{\$}120,000\times 7.65\mathrm{\%})$

9,180

Federal unemployment$(\mathrm{\$}40,000\times 0.8\mathrm{\%})$

320

State unemployment$(\mathrm{\$}40,000\times 2.5\mathrm{\%})$

1,000

Total cost

$130,500

Wages

$32,000

Social security (FICA)$(\mathrm{\$}20,000\times 1.45\mathrm{\%}+\mathrm{\$}12,000\times 7.65\mathrm{\%})$

1,208

Federal unemployment$(\mathrm{\$}4,000\times 0.8\mathrm{\%})$

32

State unemployment$(\mathrm{\$}4,000\times 2.5\mathrm{\%})$

100

Total cost

$33,340

Wages

$36,000

Social security (FICA)$(\mathrm{\$}36,000\times 7.65\mathrm{\%})$

2,754

Federal unemployment

0

State unemployment

0

Total cost

$38,754

Date

Accounts and Explanation

Debit $

Credit $

Salaries and wages expenses

$120,000

Withholding taxes payable

$16,000

FICA taxes payable

$9,180

Cash

$94,820

Payroll tax expenses

$10,500

FICA taxes payable

$9,180

FUTA taxes payable

$320

SUTA taxes payable

$1,000

Salaries and wages expenses

$32,000

Withholding taxes payable

$7,000

FICA taxes payable

$1,208

Cash

$23,792

Payroll tax expenses

$1,340

FICA taxes payable

$1,208

FUTA taxes payable

$32

SUTA taxes payable

$100

Salaries and wages expenses

$36,000

Withholding taxes payable

$6,000

FICA taxes payable

$2,754

Cash

$27,246

Payroll tax expenses

$2,754

FICA taxes payable

$2,754