Bastop Companys payroll for August 2014 is summarized below. At this point in the year some employees

Bastop Company’s payroll for August 2014 is summarized below.

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 F.I.C.A. rate is 7.65% on an employee’s wages to $102,000 and 1.45% in excess of $102,000. Of the $441,000 wages subject to F.I.C.A. tax, $30,000 of the sales wages and $25,000 of administrative wages are in excess of $102,000. Federal unemployment tax rate is 0.8% after credits. Income tax withheld amounts to $28,000 for factory, $31,000 for sales, and $9,000 for administrative.

Instructions
(a) Prepare a schedule showing the employer’s total cost of wages for August by function.
(b) Prepare the journal entries to record the factory, sales, and administrative payrolls including the employer’s payrolltaxes.

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Amount Subject to Payroll Taxes Unemployment Tax Payo Wages Due $206,000 184,000 Administrative 51,000 $441,000 FI.C.A $206,000 184,000 51,000 Federal $60,000 5,000 State $60,000 Warehouse Sales 5,000 Total $441,000 $%65,000