McLaughlin Manufacturing has the following data available for its March 31, 2011, payroll:
Wages earned ............ $1,250,000*
Income taxes withheld ......... 180,600
*All subject to Social Security and Medicare matching and withholding at
6.2 percent and 1.45 percent, respectively.
Federal unemployment taxes of 0.50 percent and state unemployment taxes of 0.80 percent are payable on the first $1,000,000.

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. McLaughlin Manufacturing would like to hire a new employee at a salary of $80,000. Assuming the 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 Stadium?

  • CreatedSeptember 22, 2015
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