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First Class Honours
Buffalo Hardware Company
Buffalo Hardware Company
Exercise 13-7
Buffalo Hardware Company . Buffalo Hardware Company’s payroll for November 2017 is summarized below.
| Amount Subject to Payroll Taxes | ||||||||
| Unemployment Tax | ||||||||
| Payroll | Wages Due | FICA | Federal | State | ||||
| Factory | $121,100 | $121,100 | $39,800 | $39,800 | ||||
| Sales | 35,100 | 35,100 | 3,600 | 3,600 | ||||
| Administrative | 39,400 | 39,400 | ||||||
| Total | $195,600 | $195,600 | $43,400 | $43,400 | ||||
At this point in the year, some employees have already received wages in excess of those to which payroll taxes apply. Assume that the state unemployment tax is 2.5%. The FICA rate is 7.65% on an employee’s wages to $118,500 and 1.45% in excess of $118,500. Of the $195,600 wages subject to FICA tax, $19,700 of the sales wages is in excess of $118,500. Federal unemployment tax rate is 0.8% after credits. Income tax withheld amounts to $15,400 for factory, $6,600 for sales, and $5,500 for administrative.
Buffalo Hardware Company
Prepare a schedule showing the employer’s total cost of wages for November by function. (Round answers to 0 decimal places, e.g. 5,275.)
Prepare the journal entries to record the factory, sales, and administrative payrolls including the employer’s payroll taxes. (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 the amount is entered. Do not indent manually. Round answers to 0 decimal places, e.g. 5,125.)
