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Exercise 13-6 The payroll of Sheffield Company for September 2016 is as follows. Total payroll was $502,000, of which $102,000 is exempt from Social Security

Exercise 13-6

The payroll of Sheffield Company for September 2016 is as follows. Total payroll was $502,000, of which $102,000 is exempt from Social Security tax because it represented amounts paid in excess of $118,500 to certain employees. The amount paid to employees in excess of $7,000 was $366,000. Income taxes in the amount of $77,900 were withheld, as was $9,300 in union dues. The state unemployment tax is 3.5%, but Sheffield Company is allowed a credit of 2.3% by the state for its unemployment experience. Also, assume that the current FICA tax is 7.65% on an employees wages to $118,500 and 1.45% in excess of $118,500. No employee for Sheffield makes more than $125,000. The federal unemployment tax rate is 0.8% after state credit. Prepare the necessary journal entries if the wages and salaries paid and the employer payroll taxes are recorded separately. (Round answers to 0 decimal places, e.g. 5,275. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts .Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation

Debit

Credit

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(To record wages and salaries paid)

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(To record employer payroll taxes)

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