Exercise 13-7 (Part Level Submission) - part C

Pearl Hardware Companys payroll for November 2017 is summarized below.

					Amount Subject to Payroll Taxes
						Unemployment Tax
Payroll		Wages Due		FICA		Federal		State
Factory		$129,400		$129,400		$37,200		$37,200
Sales		33,600		33,600		4,200		4,200
Administrative		35,000		35,000
Total		$198,000		$198,000		$41,400		$41,400

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 employees wages to $118,500 and 1.45% in excess of $118,500. Of the $198,000 wages subject to FICA tax, $19,900 of the sales wages is in excess of $118,500. Federal unemployment tax rate is 0.8% after credits. Income tax withheld amounts to $17,200 for factory, $7,300 for sales, and $6,300 for administrative.

(a)

	Your answer is correct.

Prepare a schedule showing the employers total cost of wages for November by function. (Round answers to 0 decimal places, e.g. 5,275.)

		Factory		Sales		Administrative		Total
Salaries and Wages		$ 129400		$ 33600		$ 35000		$ 198000
FICA Taxes		9899		1337		2678		13913
FUTA Taxes		298		34		0		331
SUTA Taxes		930		105		0		1035
Total Cost		$ 140527		$ 35075		$ 37678		$ 213279

(b) Prepare the journal entries to record the factory, sales, and administrative payrolls including the employer's payroll taxes. (If no entry is required, select "No Entry" for the account titles and enter o for the amounts. Credit account title automatically indented when the amount is entered. Do not indent manually. Round answers to o decimal places, e.g. 5,125.) Debit Credit Account Titles and Explanation Factory Payroll: Salaries and Wages Expense 129400 Withholding Taxes Payable 17200 FICA Taxes Payable 9899 Cash 102301 (To record salaries and wages expense.) Payroll Tax Expense 11127 FICA Taxes Payable 9899 FUTA Taxes Payable 298 930 SUTA Taxes Payable (To record payroll tax expense.) Sales Payroll: Salaries and Wages Expense 33600 Withholding Taxes Payable FICA Taxes Payable Cash (To record salaries and wages expense.) Payroll Tax Expense FICA Taxes Payable FUTA Taxes Payable SUTA Taxes Payable (To record payroll tax expense.) Administrative Payroll: Salaries and Wages Expense 35000 Withholding Taxes Payable FICA Taxes Payable Cash (To record salaries and wages expense.) Payroll Tax Expense 2678 FICA Taxes Payable 2678