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12 November, 09:24

The total payroll of Concord Company for the month of October, 2017 was $1020000, of which $185000 represented amounts paid in excess of $118500 to certain employees. $601000 represented amounts paid to employees in excess of the $7300 maximum subject to unemployment taxes. $185000 of federal income taxes and $18400 of union dues were withheld. The state unemployment tax is 1%, the federal unemployment tax is. 8%, and the current F. I. C. A. tax is 7.65% on an employee's wages to $118500 and 1.45% in excess of $118500. What amount should Concord record as payroll tax expense?

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  1. 12 November, 13:18
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    Answer: $74,102

    Explanation:

    FICA Tax Payable by Employer = 1.45% * $185,000 + 7.65% * ($1,020,000 - $185000)

    = $2,682.5 + $63,877.5

    = $66,560

    State unemployment tax = 1% * ($1,020,000 - $601,000)

    = $4,190

    Federal unemployment tax = 0.8% * ($1,020,000 - $601,000)

    = $3,352

    Payroll tax expense = FICA Tax Payable by Employer + state unemployment tax + federal unemployment tax

    = $66,560 + $4,190 + $3,352

    = $74,102
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