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P13-4 (LO1) Payroll Tax Entries
The following is a payroll sheet for Otis Imports for the month of September 2020. Selected information follows.
	Unemployment compensation rate allowed by the state		1.00%
	Unemployment compensation rate for the federal government	0.80%
	Maximum wages for unemployment for federal and state governments	$ 7,000
	Federal income tax rate for all employees			10%
	FICA tax on employee and employer				7.65%
	Maximum wages for FICA tax				$ 128,400
	Employer and employee rate for an employees excess wages	1.45%
	Maximum wages per employee to avoid the excess wages charge	$ 128,400
	Name	Earnings to Aug 31	Sept Earnings	Income Tax Withholding	F.I.C.A.	State U.C.	Federal U.C.
	B.D. Williams	$ 6,800	$ 800				$ 61
	D. Raye	6,500	700
	K. Baker	7,600	1,100
	F. Lopez	13,600	1,900
	A. Daniels	107,000	13,000
	B. Kingston	112,000	16,000
Instructions:
(a)	Complete the payroll sheet and make the necessary entry to record the payment of the payroll.
	Name	Earnings to Aug 31	Sept Earnings	Income Tax Withholding	F.I.C.A.	State U.C.	Federal U.C.
	B.D. Williams	$ 6,800	$ 800
	D. Raye	6,500	700
	K. Baker	7,600	1,100
	F. Lopez	13,600	1,900
	A. Daniels	107,000	13,000
	B. Kingston	112,000	16,000
	Total
			Debit	Credit
(b)	Make the entry to record the payroll tax expenses of Otis Import Company.
			Debit	Credit
(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.
			Debit	Credit

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