Total Payroll of Walnut Co

question 103

Essay

Total payroll of Walnut Co. was $1,840,000, of which $320,000 represented amounts paid in excess of $106,800 to certain employees. The amount paid to employees in excess of $7,000 was $1,440,000. Income taxes withheld were $450,000. The state unemployment tax is 1.2%, the federal unemployment tax is .8%, and the F.I.C.A. tax is 7.65% on an employee's salaries and wages to $106,800 and 1.45% in excess of $106,800.
Instructions
(a) Prepare the journal entry for the salaries and wages paid.
(b) Prepare the entry to record the employer payroll taxes.

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Definitions:

Quantity

The amount or number of a material or product available or produced.

Price

The expenditure foreseen, necessary, or allocated in trading for something.

Socially-Optimal Quantity

The level of production that maximizes societal welfare, considering both the benefits and costs of production and consumption.

Market-Equilibrium

A condition where the supply and demand in the market equalize, leading to stable prices.