Problem 8-74A (Algorithmic) Payroll Accounting

Stadium Manufacturing has the following data available for its September 30, 2019, payroll:

Wages earned	$332,000	*
Federal income taxes withheld	84,000

* All subject to Social Security and Medicare matching and withholding of 6.2% and 1.45%, respectively.

Federal unemployment taxes of 0.80% and state unemployment taxes of 1.20% are payable on $312,000 of the wages earned.

Required:

If required, round your answers to the nearest cent.

1. Compute the amounts of taxes payable and the amount of wages that will be paid to employees.

Social Security	$
Medicare	$
Federal unemployment	$
State unemployment	$
Net pay	$

Feedback

1. Payroll taxes are withheld from employee wages and salaries, and then paid to the taxing authority.

Prepare the journal entries to record the wages earned and the payroll taxes. If an amount box does not require an entry, leave it blank.

Sept. 30	Wages Expense
	Medicare Taxes Expense (Employer)
	Federal Unemployment Taxes Expense
	State Unemployment Taxes Expense
	Accounts Payable
	(Record wages and liabilities)
Sept. 30	Medicare Taxes Payable (Employer)
	Social Security Taxes Payable (Employer)
	Social Security Taxes Payable (Employer)
	Federal Unemployment Taxes Payable
	(Record employer payroll taxes)

Feedback

1. Payroll taxes are withheld from employee wages and salaries, and then paid to the taxing authority.

2. Conceptual Connection: Stadium Manufacturing would like to hire a new employee at a salary of $50,000. Assuming the payroll taxes are as described above (with unemployment taxes paid on the first $7,000) and fringe benefits (e.g., health insurance, retirement, etc.) are 30% of gross pay, what will be the total cost of this employee for Stadium? Round your answer to two decimal places. $