Prepare a schedule showing the employers total cost of wages

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Reference no: EM131640262

Exercise - Ayayai Hardware Company's payroll for November 2017 is summarized below:




Amount Subject to Payroll Taxes




Unemployment Tax

Payroll

Wages Due

FICA

Federal

State

Factory

$126,600

$126,600

$40,500

$40,500

Sales

28,800

28,800

4,200

4,200

Administrative

38,900

38,900



   Total

$194,300

$194,300

$44,700

$44,700

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 employee's wages to $118,500 and 1.45% in excess of $118,500. Of the $194,300 wages subject to FICA tax, $21,300 of the sales wages is in excess of $118,500. Federal unemployment tax rate is 0.8% after credits. Income tax withheld amounts to $16,800 for factory, $7,700 for sales, and $6,800 for administrative.

Prepare a schedule showing the employer's total cost of wages for November by function.

Prepare the journal entries to record the factory, sales, and administrative payrolls including the employer's payroll taxes.

Reference no: EM131640262

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