Stadium Manufacturing has the following data available for its September 30, 2011, payroll:
Wages earned ............. $315,000*
Income taxes withheld ......... 79,900
*All subject to Social Security and Medicare matching and withholding of 6.2 percent and 1.45 percent, respectively.
Federal unemployment taxes of 0.80 percent and state unemployment taxes of 1.20 percent are payable on $295,312.50 of the wages earned.

1. Compute the amounts of taxes payable and the amount of wages that will be paid to employees. Then prepare the journal entries to record the wages earned and the payroll taxes
2. Stadium Manufacturing would like to hire a new employee at a salary of $50,000. 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 30% of gross pay, what will be the total cost of this employee for Stadium?

  • CreatedSeptember 22, 2015
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