The ises Saved Help Save & Exit Required information The following information a

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The ises Saved Help Save & Exit Required information The following information applies to the questions displayed below. BMX Company has one employee. FICA Social Security taxes are 6.2% ofthe first $118,500 paid to its employee, and FICA Medicare taxes are t 45% of gross pay. For BMX, its FUTA taxes are 06% and SUTA taxes are 2.9% of the first $7,000 paid to its employee. croas Pay Gross Pay gh Auguat 5,700 19,400 113,400 $1.800 3,300 9,200 b. Compute BMX's amounts for each of these four taxes as applied to the employee's gross earnings for September under each of three separate situations (a). (b), and (c). (Round your answers to 2 decimal places) September Earnings Tax Rate Tax Amount 2.60000 2.800.00 1,700.00 700 00 620%| 1 45% 060% 290% $ 161.20 37.70 10 20 49.30 FUTA SUTA

Explanation / Answer

Solution:

Computing BMX's Amounts for each of these four taxes as applied to the Employee's Gross Earnings for September under each of the three seperate situations (a), (b) and (c):

Preparing the Employer's September 30 Journal Entries to Record Salary Expense and its Related Payroll Liabilities for this Employee:

a) Tax September Earnings Subject to Tax Tax Rate Tax Amount FICA-Social Security $1,800 6.20% $111.60 FICA-Medicare $1,800 1.45% $26.10 FUTA $1,300 0.60% $7.80 SUTA $1,300 2.90% $37.70 b) Tax September Earnings Subject to Tax Tax Rate Tax Amount FICA-Social Security $3,300 6.20% $204.60 FICA-Medicare $3,300 1.45% $47.85 FUTA 0 0.60% 0.00 SUTA 0 2.90% 0.00 c) Tax September Earnings Subject to Tax Tax Rate Tax Amount FICA-Social Security $5,100 6.20% $316.20 FICA-Medicare $9,200 1.45% $133.40 FUTA 0 0.60% 0.00 SUTA 0 2.90% 0.00

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