Principles of Accounting Volume 1
19th Edition
ISBN: 9781947172685
Author: OpenStax
Publisher: OpenStax College
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Textbook Question
Chapter 12, Problem 10PA
Lemur Corp. is going to pay three employees a year-end bonus. The amount of the year-end bonus and the amount of federal income tax withholding are as follows.
Lemur’s payroll deductions include FICA Social Security at 6.2%, FICA Medicare at 1.45%, FUTA at 0.6%, SUTA at 5.4%, federal income tax as previously shown, state income tax at 5% of gross pay, and 401(k) employee contributions at 2% of gross pay.
Record the entry for the employee payroll on December 31.
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Ana Rosa, president of the Apoka Company, has a bonus arrangement with the company under which she receives 10% of the net income after deducting taxes and bonuses each year. For the current year, the net income before deducting either the provision for income taxes or the bonus is P4,650,000. The bonus is deductible for tax purposes, and the tax rate is 30%.
1. Compute the appropriate provision for income tax for the year.
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$7,000 for each employee. Complete the necessary journal entry. (If no entry is required for a transaction/event, select "No journal
entry required" in the first account field.)
View transaction list
Journal entry worksheet
Record the compensation expense for FICA taxes and FUTA taxes.
Note: Enter debits before credits.
Date
General Journal
Debit
Credit
January 15
Clear ento
Maw.popacallourn
Pecordentn
Peyton Company's payroll for the year is $741,150. Of this amount, $472,770 is for wages paid in excess of $7,000 to each individual employee. The SUTA rate in Peyton Company's state is 2.9% on the first $7,000 of each employee's earnings. Compute:
Net FUTA tax
Chapter 12 Solutions
Principles of Accounting Volume 1
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