| (Payroll Tax Entries) Below is a payroll sheet for Otis Import Company for the month of September 2014. The company is allowed a 1% | |
| unemployment compensation rate by the state; the federal unemployment tax rate is 0.8% 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 $113,700. In addition, |
| 1.45% is charged both employer and employee for an employee's wages in excess of $113,700 per employee. | | |
| | | | | | Unemployment Tax | | | | | | |
| Name | Earnings to Aug. 31 | September Earnings | Income Tax Withholding | FICA | State | Federal | | | | | |
| B.D. Williams | $ 6,700 | $ 700 | | | | | | | | | |
| D. Raye | 6,400 | 800 | | | | | | | | | |
| K. Baker | 7,700 | 1,000 | | | | | | | | | |
| F. Lopez | 13,700 | 1,700 | | | | | | | | | |
| A. Daniels | 108,000 | 12,000 | | | | | | | | | |
| B. Kingston | 110,000 | 15,000 | | | | | | | | | |
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| Instructions | | | | | | | | | | | | | |
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| (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. |
| Please show all calculations for your solution. Solution can be in Word and Excel. | | | | | | |
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