According to a Summary of the Payroll of Sinclair Company

question 89

Essay

According to a summary of the payroll of Sinclair Company, $545,000 was subject to the 6.0% social security tax and the 1.5% Medicare tax. Also, $10,000 was subject to state and federal unemployment taxes.(a)Calculate the employer's payroll taxes using the following rates: state unemployment tax, 5.4%; federal unemployment tax, 0.8%.(b)Journalize the entry to record the accrual of the employer's payroll taxes.

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Definitions:

Market Economy

An economic system where decisions regarding investment, production, and distribution are based on supply and demand, and prices of goods and services are determined in a free price system.

Price Floor

A government-set minimum price that can be charged for goods and services, aimed at protecting producers.

Equilibrium Price

The price at which the quantity of goods supplied matches the quantity of goods demanded.

Price Ceiling

A price ceiling is a government-imposed limit on how high a price can be charged for a product or service, typically intended to protect consumers.