The total payroll of Rene Auber Company for September 2008 was $480,000, of which $110,000 is exempt from FICA tax because it represented amounts paid in excess of $97,500 to certain employees. The amount paid to employees in excess of $7,000 was $400,000. Income taxes in the amount of $90,000 were withheld, as well as $9,000 in union dues. The state unemployment tax is 3.5%, but Auber Company is allowed a credit of 2.3% by the state for its unemployment experience. Also, assume that the current FICA tax is 7.65% on an employee’s wages to $97,500 and 1.45% in excess of $97,500. No employee for Auber makes more than $125,000. The federal unemployment tax rate is 0.8% after state credit.
Instructions
Prepare the necessary journal entries if the wages and salaries paid and the employer payroll taxes are recorded separately.