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Published byRoberta Palmer Modified over 9 years ago
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Sample Problem Chapter 11
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Computing and recording employer’s payroll tax expense. The payroll register of Clifton’s Automotive and Detail Repair Shop showed total employee earnings of $2,890 for the week ended April 8, 2007. INSTRUCTIONS 1.Compute the employer’s payroll taxes for the period. The tax rates are as follows: 2.Prepare a general journal entry to record the employer’s payroll taxes for the period. Analyze: If the FUTA tax rate had been 1.2 percent, what total employer payroll taxes would have been recorded?
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Computing employer’s payroll tax expense 1.Compute the employer’s payroll taxes for the period. The tax rates are as follows: Social security6.2% x $2,890 = 179.18 Medicare1.45% x $2,890 = 41.91 FUTA0.8% x $2,890 = 23.12 SUTA2.2 % x $2,890 = 63.58
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Recording employer’s payroll tax expense The general journal entry would be: Payroll tax expense307.79 Social security tax payable179.18 Medicare tax payable 41.91 Federal Unemployment tax payable 23.12 State Unemployment tax payable 63.58
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Analyze If the FUTA tax rate had been 1.2%, the total employers payroll taxes would have been $319.35. $2,890 x 1.2% = 34.68 34.68+179.18+41.91+63.58=319.35
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