The following illustrates the concept of accrued liabilities related to payroll deductions. Assume Mill Company has a weekly payroll of $40,000 that is entirely subject to FICA and Medicare (7.65%), federal unemployment tax (.8%), and state unemployment tax (3%). Income tax withholding amounts to 13.2 percent, and employee credit union deductions for the week total $1275. No employee's wages exceed the $7,000 compensation ceiling got unemployment taxes. Two entries are necessary to record the payroll: (1) salaries and wages paid to employees, and (2) employer's payroll taxes. What are the two entries?

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The two entries to record the payroll for Mill Company would be as follows Entry 1 Salaries and wage... View the full answer