Acc422 Intermediate Accounting: P13-4 Below is a payroll sheet for Otis Import Company

Acc422 Intermediate Accounting
P13-4 Payroll Tax Entries
Below is a payroll sheet for Otis Import Company for the month of September 2014. The   company is allowed a 1.00% unemployment compensation rate by the state; the federal unemployment tax rate is 0.80% and the maximum for both is $7,000. Assume a 10% federal income tax rate for all employees and a 7.65% FICA tax on employee and employer on a maximum of $110,100. In addition, 1.45% is charged both employer and employee for an employee’s wages in excess of $110,100 per employee.    
Name Earnings to Aug 31 September Earnings Income Tax Witholding FICA State U.C. Federal U.C.
B.D. Williams 6,800 800
D. Prowse 6,300 700
K. Baker 7,600 1,100
F. Oz 13,600 1,900
A. Daniels 105,000 15,000
B. Mayhew 112,000 16,000
      
Instructions:      
(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 each month.
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