# Payroll Tax Entries Cedarville Company pays its office employee payroll weekly. Below is a partial list of employees and their payroll data for August. Because August is their vacation period,...

Payroll Tax Entries Cedarville Company pays its office employee payroll weekly. Below is a partial list of employees and their payroll data for August. Because August is their vacation period, vacation pay is also listed. Assume that the federal income tax withheld is 10% of wages. Union dues withheld are 2% of wages. Vacations are taken the second and third weeks of August by Robbins, Kirk, and Sprouse. The state unemployment tax rate is 2.5% and the federal is 0.8%, both on a \$7,000 maximum. The F.I.C.A. rate is 7.65% on employee and employer on a maximum of \$102,000 per employee. In addition, a 1.45% rate is charged both employer and employee for an employee’s wages in excess of \$102,000. Make the journal entries necessary for each of the four August payrolls. The entries for the payroll and for the company’s liability are made separately. Also make the entry to record the monthly payment of accrued payrollliabilities.

## Solution

Robert answered on Dec 31 2021
(Payroll tax entries) Cedarville Company pays its office employee payroll weekly
Entries for Payroll 1
Wages and Salaries Expense
1,040.00*

Withholding Taxes Payable (10% X \$1,040)*

104.00

FICA Taxes Payable (7.65% X \$1,040)

79.56

Union Dues Payable (2% X \$1,040)

20.80

Cash

835.64

*\$200 + \$150 + \$110 + \$250 + \$330 = \$1,040

Payroll Tax Expense
94.74

FICA Taxes Payable (7.65% X \$1,040)

79.56

Federal Unemployment Tax Payable

[.8% X (\$200 + \$150 + \$110)]

3.68

State Unemployment Tax...
SOLUTION.PDF