According to a summary of the payroll of Kirby Co., $180,000 in earnings were subject to the 7.5% FICA tax. Also, $60,000 in earnings were subject to state and federal unemployment taxes.

3. Calculate the amount of the employer's payroll taxes, using the following rates: state unemployment, 4.3%; federal unemployment, 0.8%.

4. Which of the following describes the journal entry to record the accrual of the employer’s payroll taxes?

a. Increase Payroll Expense; Decrease Cash

b. Increase Payroll Tax Expense; Increase Salaries and Wages Payable

c. Increase Payroll Expense; Increase Retained Earnings

d. Increase Payroll Tax Expense; Decrease Cash

e. Increase Payroll Tax Expense; Increase Salaries and Wages Payable

Compute net pay – employee over FICA cap

5. In 2016, Jane J receives a salary of $144,000 per year. The company pays employees twice monthly (24 pay periods per year). For the November 30 pay period, the following information is available for Jane:

Year to Date Earnings, $132,000

Federal income tax withheld, $1,800;

Social security tax rate, 6.0% on maximum of $118,500

Medicare tax rate, 1.5% on all earnings.

What is the net pay for Jane J?

Answer rating: 100% (QA)

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