Total payroll of Walnut Co. was $2,750,000, of which $500,00…
Total payroll of Walnut Co. was $2,750,000, of which $500,000 represented amounts paid in excess of $176,100 (the annual limit for FICA) to certain employees. The amount paid to employees in excess of $7,000 (the annual limit for FUTA and SUTA) was $2,100,000. Income taxes withheld were $700,000. The state unemployment tax is 5.2%, the federal unemployment tax is 0.8%, and the FICA tax is 7.65% on an employee’s salaries and wages to $176,100 and 1.45% in excess of $176,100. Union dues withheld are 1.5% of payroll. Instructions: Prepare the journal entry to record the salaries and wages paid and the employee payroll deductions. Prepare the journal entry to record the employer’s payroll taxes.