BMX Company has one employee. FICA Social Security taxes are 6.2% of the first $
ID: 2793676 • 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. 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
situation 1:
FICA social security tax payable by employer : 500 *.062 = 31
FICA medicare tax payable :500*1.45% = 7.25
FUTA tax payable : 400*.6% = 2.4
SUTA Tax payable : 400*2.9%=11.6
Total payroll tax expense = 52.25
**FUTA and SUTA are applicable on income Till 7000 .so september income subject to FUTA AND SUTA =7000-6600 august = 400
Account Debit credit Payroll tax expense 52.25 FICA social security tax payable 31 FICA medicare tax payable 7.25 FUTA tax payable 2.4 SUTA tax payable 11.6Related Questions
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