Reset of Payroll Tax Limits

The first paycheck of the new year starts with the Social Security, FUTA, and SUTA limits set at $0.$

Even if the earnings relate to the prior year. $($i$.$e$.$ Payday is January $2.$ Even though the earnings were

from last year, all the limits reset. This will cause Net pay for employees to be lower presuming some

have met their FICA limit$.$ It will cause the company to have higher Payroll tax expense. $($This is a

Homework issue$)$

The following information about the payroll for the week ended December $30$ was obtained from the

records of Qualitech Co$.$:

Assuming that the payroll for the last week of the year is to be paid on December $31,$ journalize the

following entries

a$.$ December $30,$ to record the payroll. Include the year when enter the date in the journal.

b$.$ December $30,$ to record the employer's payroll taxes on the payroll to be paid on December

Of the total payroll for the last week of the year, $$35,000$ is subject to unemployment

compensation taxes.

Assuming that the payroll for the last week of the year is to be paid on January $5$ of the following

fiscal year, journalize the following entries

a$.$ December $30,$ to record the payroll. Include the year when enter the date in the journal.

b$.$ January $5,$ to record the employer's payroll taxes on the payroll to be paid on January $5.$

Because it is a new fiscal year, all $$675,000$ in salaries is subject to unemployment

compensation taxes.