A Company's Payroll for the Week Ended May 15 and Included

question 191

Essay

A company's payroll for the week ended May 15 and included earned salaries of $20,000.All of that week's pay is subject to FICA social security taxes of 6.2% and Medicare taxes of 1.45%.In addition,the company withholds the following amounts for this weekly pay period: $900 for medical insurance,$3,400 for federal income taxes and $180 for union dues.
a. Prepare the general journal entry to accrue the payroll
b. The company is subject to state unemployment taxes at the rate of 2% and federal unemployment taxes at the rate of 0.8%. By May 15, some employees had earned over $7,000, so only $9,000 of the $20,000 weekly gross pay was subject to unemployment tax. Prepare the general journal entry to accrue the employer's payroll tax expense.

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Definitions:

Fallacy of Composition

The error of assuming that what is true of a member of a group is true for the group as a whole.

Complex Product

A product that is made up of various components and possibly involves intricate processes in its manufacture or usage.

Assembly Line

A manufacturing process in which parts are added to a product in a sequential manner to create a finished product much faster than with handcrafting-type methods.

Resources

The inputs, or factors of production, used to produce the goods and services that people want; resources consist of labor, capital, natural resources, and entrepreneurial ability.