Below is a payroll sheet for otis import company for the month of

P13-4 (Payroll Tax Entries) 

 

Below is a payroll sheet for Otis Import Company for the month of September 2014. The company is allowed a 1% unemployment compensation rate by the state; the federal unemployment tax rate is 0.8% and the maximum for both is $7,000. Assume a 10% federal income tax rate for all employees and a 7.65% FICA tax on employee and employer on a maximum of $113,700. In addition, 1.45% is charged both employer and employee for an employee’s wages in excess of $113,700 per employee.

 

 

 

 

 

              Unemployment Tax

Name

Earnings to Aug. 31

September Earnings

Income Tax Withholding1

 FICA

 State

Federal

B.D. Williams

$  6,800

$   800

 

 

 

 

D. Raye

   6,500

    700

 

 

 

 

K. Baker

   7,600

  1,100

 

 

 

 

F. Lopez

  13,600

  1,900

 

 

 

 

A. Daniels

 107,000

 13,000

 

 

 

 

B. Kingston

 112,000

 16,000

 

 

 

 

Instructions

  • (a)Complete the payroll sheet and make the necessary entry to record the payment of the payroll.
  • (b)Make the entry to record the payroll tax expenses of Otis Import Company.
  • (c)Make the entry to record the payment of the payroll liabilities created. Assume that the company pays all payroll liabilities at the end of each month.