MRI Company has one employee. FICA Social Security taxes are 6.2% of the first $
ID: 2371536 • Letter: M
Question
MRI Company has one employee. FICA Social Security taxes are 6.2% of the first $106,800 paid to its employee, and FICA Medicare taxes are 1.45% of gross pay. For MRI, its FUTA taxes are 0.8% and SUTA taxes are 2.9% of the first $7,000 paid to its employee.
Prepare the employer’s September 30 journal entries to record salary expense and its related payroll liabilities for this employee. The employee’s federal income taxes withheld by the employer are $135 for this pay period. (Round your answers to 2 decimal places. Omit the "$" sign in your response)
MRI Company has one employee. FICA Social Security taxes are 6.2% of the first $106,800 paid to its employee, and FICA Medicare taxes are 1.45% of gross pay. For MRI, its FUTA taxes are 0.8% and SUTA taxes are 2.9% of the first $7,000 paid to its employee.
Explanation / Answer
FUTA and SUTA are only paid on the first $7,000. Since the employee has already earned $6,400, only the next $600 will be taken into account.
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