BMX Company has one employee. FICA Social Security taxes are 6.2% of the first $

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. Gross Pay through August Gross Pay for September a. $ 6,600 $ 500 b. 18,400 2,300 c. 112,400 8,200 ________________________________________ 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.)

Explanation / Answer

axes 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 500 6.20% 31 FICA—Medicare 500 1.45% 7.25 Total taxes withheld 118.25 Date General Journal Debit Credit Sep-30 Salaries expense 500 FICA—Social Security taxes payable 31 FICA—Medicare taxes payable 7.25 Employee federal income taxes payable 80 Salaries payable 381.75

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