BMX Company has one employee. FICA Social Security taxes are 6.2% of the first $
ID: 2579784 • Letter: B
Question
BMX Company has one employee. FICA Social Security taxes are 6.2% of the first $118,500 paid to its employee, and FICA Medicare taxes are 1.45% of gross pay. For BMX, its FUTA taxes are 0.6% and SUTA taxes are 2.9% of the first $7,000 paid to its employee.
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.)
a.)
b.)
c.)
d.) Assuming situation a, 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. (Round your answers to 2 decimal places.)
Taxes to be Withheld From Gross Pay (Employee-Paid Taxes)
e. Prepare the employer's September 30 journal entry to record accrued salary expense and its related payroll liabilities for this employee.
f.) Assuming situation a, prepare the employer’s September 30 journal entries to record the employer’s payroll taxes expense and its related liabilities. (Round your answers to 2 decimal places.)
g.)
Gross Pay through August Gross Pay for September a. $ 6,400 $ 800 b. $ 18,200 $ 2,100 c. $ 112,200 $ 8,000Explanation / Answer
a Tax September Earnings Subject to Tax Tax Rate Tax Amount FICA-Social Security 800 6.20% 49.6 FICA-Medicare 800 1.45% 11.6 FUTA 600 0.60% 3.6 SUTA 600 2.90% 17.4 b Tax September Earnings Subject to Tax Tax Rate Tax Amount FICA-Social Security 2,100.00 6.20% 130.2 FICA-Medicare 2,100.00 1.45% 30.45 FUTA 0 0.60% 0 SUTA 0 2.90% 0 c) Tax September Earnings Subject to Tax Tax Rate Tax Amount FICA-Social Security 6,300.00 6.20% 390.6 FICA-Medicare 8,000.00 1.45% 116 FUTA 0 0.60% 0 SUTA 0 2.90% 0 d Taxes to be Withheld From Gross Pay (Employee-Paid Taxes) 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 e Date General Journal Debit Credit Sep-30 Salaries expense 800 FICA—Social Security taxes payable 49.6 FICA—Medicare taxes payable 11.6 Employee federal income taxes payable 80 Salaries payable 658.8 f Employer Payroll taxes September earnings subject to tax Tax Rate Tax Amount FICA-Social Security 800 6.20% 49.6 FICA-Medicare 800 1.45% 11.6 FUTA 600 0.60% 3.6 SUTA 600 2.90% 17.4 Total Payroll Taxes Expense 82.2 g Date General Journal Debit Credit Sep. 30 Payroll taxes expense 82.2 FICA—Social security taxes payable 49.6 FICA—Medicare taxes payable 11.6 Federal unemployment taxes payable 3.6 State unemployment taxes payable 17.4
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