Jet Enterprises has the following data available for its April 30, 2019, payroll:
Wages earned........................................ $485,000*
Federal income taxes withheld ...................... 92,300
* All subject to Social Security and Medicare matching and withholding of 6.2% and 1.45%, respectively.
Federal unemployment taxes of 0.70% and state unemployment taxes of 0.90% are payable on $405,700 of the wages earned.
Required:
1. Compute the amounts of taxes payable and the amount of wages that will be paid to employees. Then prepare the journal entries to record the wages earned and the payroll taxes.
2. Jet would like to hire a new employee at a salary of $65,000. Assuming payroll taxes are as described above (with unemployment taxes paid on the first $9,000) and fringe benefits (e.g., health insurance, retirement, etc.) are 25% of gross pay, what will be the total cost of this employee for Jet?