Zippy, LLC has one employee who has worked January June of the current year. The
ID: 2508613 • Letter: Z
Question
Zippy, LLC has one employee who has worked January June of the current year. The employee is single, paid weekly, and claims one allowance on her W-2. The company is in a state that has no state income taxes. The FICA Social Security tax rate is 6.2% on the first $1 18,500 of wages and the FICA Medicare tax rate is 1.45% on all wages. Zippy, LLC's FUTA tax rate is 0.6% on the first $7,000 of wages and their SUTA tax rate is 2.3% on the first $8,000 of wages. The en arnings thus far are as follows: Gross pay Jan - May Gross pay for June $7,70 $1,260 a) Use the information aueve and the IRS tax table (click to pop open) to calculate all of the taxes that should be withheld from the employees paycheck and her net pay for June. Round values to 2 decimal places if needed. Gross Pay Federal Withholding FICA-SS FICA-Medicare Net Pay b) Prepare the journal entry Zippy, LLC. will record to accrue the june wages for this employee. Date Description Debit Credit 06/30 to accrue salaries and withholding for june payroll c) Use the information provided to calculate the payroll taxes that Zippy must pay on the employee's behalf for the month of June FICA-SS FICA-Medicare FUTA SUTA Total ER taxesExplanation / Answer
Federal Withholding = 1260 * 10% = $126 FICA -SS = 1260 * 6.2% = $78.12 FICA - Medicare tax = 1260 * 1.45% = $18.27 FUTA = 0 (being gross > 7000) SUTA = 300*2.3% = $6.90 a) Net Pay: Grpss Pay 1260 Federal Withholding 126 FICA-SS 78.12 FICA - Medicare 18.27 Net pay 1037.61 Journal Entry on June 30: Debit salary expense 1260 credit Federal Withholding tax 126 credit FICA-SS 78.12 credit FICA - Medicare 18.27 credit Salary payable 1037.61 b) Payroll expense: FICA-SS 78.12 FICA - Medicare 18.27 FUTA 0 SUTA 6.9 Total ER taxes 103.29 Journal Entry: Debit $ Credit $ 30-Jun Payroll Expense 103.29 FICA - SS TAX 78.12 FICA - Medicare tax 18.27 FUTA 0 SUTA 6.9
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