Payroll-related journal entries LO P2 BMX Company has one employee. FICA Social

Question

Payroll-related journal entries LO P2 BMX Company has one employee. FICA Social Security taxes are 6.2% of the first $110,100 paid to its employee, and FICA Medicare taxes are 1.45% of gross pay. For BMX. 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 $80 for this pay period.

Explanation / Answer

Solution:

Calculation of Taxes to be withheld from gross pay (Employee-paid taxes:

General Journal Entry:

September earnings subject to tax Tax Rate Tax Amount Federal income tax 80 FICA-Social Security 800 6.20% 49.6 FICA-Medicare 800 1.45% 11.6 Total taxes withheld 141.2

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