Bailey Dry Cleaners has six employees who were paid the following wages during 2019: Frank Johnson...

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Bailey Dry Cleaners has six employees who were paid the following wages during 2019: Frank Johnson $30,000 Bill Long 16,000 Duff Morse 130,000 Laura Stewart 30,000 Cindy Sharpe 27,000 Melissa Ledbetter 22,000 Total $255,000 The state allows the company a 1% unemployment compensation merit-rating reduction from the normal rate of 5.4%. The federal unemployment rate is 0.6%. The maximum unemployment wages per employee are $7,000 for both the state and the federal government. Income tax withholdings of 20% are applied to all employees. A F.I.C.A. tax rate of 8% on the employee and 8% on the employer is applied to the first $117,000 of each employee's wages. Required: 1. Calculate the amount of payroll taxes to be paid by Bailey. 2. Prepare the journal entries to record the payment of payroll and the payroll tax expense. Bailey Dry Cleaners has six employees who were paid the following wages during 2019: Frank Johnson $30,000 Bill Long 16,000 Duff Morse 130,000 Laura Stewart 30,000 Cindy Sharpe 27,000 Melissa Ledbetter 22,000 Total $255,000 The state allows the company a 1% unemployment compensation merit-rating reduction from the normal rate of 5.4%. The federal unemployment rate is 0.6%. The maximum unemployment wages per employee are $7,000 for both the state and the federal government. Income tax withholdings of 20% are applied to all employees. A F.I.C.A. tax rate of 8% on the employee and 8% on the employer is applied to the first $117,000 of each employee's wages. Required: 1. Calculate the amount of payroll taxes to be paid by Bailey. 2. Prepare the journal entries to record the payment of payroll and the payroll tax expense.

Answer rating: 100% (QA)

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