Payroll Tax Entries Below is a payroll sheet for Otis Import Company for the month of September

2010. The company is allowed a 1% unemployment compensation rate by the state; the federal unemployment tax rate is 0.8% and the maximum for both is $7,000. Assume a 10% federal income tax rate for all employees and a 7.65% F.I.C.A. tax on employee and employer on a maximum of $102,000. In addition, 1.45% is charged both employer and employee for an employee's wages in excess of $102,000 per employee.

(a) Complete the payroll sheet and make the necessary entry to record the payment of the payroll.

(b) Make the entry to record the payroll tax expenses of Otis Import Company.

(c) Make the entry to record the payment of the payroll liabilities created. Assume that the company pays all payroll liabilities at the end of eachmonth.

Transcribed Image Text:

Income Earnings to Aug. 31 $ 6,800 State U.C. Federal September Earnings $ 800 Тах U.C. Name B.D. Williams D. Raye Withholding EL.C.A. 6,500 700 1,100 1,900 13,000 16,000 K. Baker 13,600 105,000 112,000 A. Daniels B. Kingston