In: Accounting
BMX Company has one employee. FICA Social Security taxes are 6.2% of the first $128,400 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 5.4% of the first $7,000 paid to its employee.
Gross Pay through August 31 |
Gross Pay for September | |||||||||
a. | $ | 6,000 | $ | 1,500 | ||||||
b. | 2,750 | 2,850 | ||||||||
c. | 123,600 | 9,500 | ||||||||
rev: 05_16_2019_QC_CS-168714
Assuming situation (a), prepare the employer’s September 30 journal entries to record the employer’s payroll taxes expense and its related liabilities.
Employer Payroll taxes |
September Earnings Subject to Tax |
Tax Rate | Tax Amount |
FICA - Social Security | $ 1,500 | 6.20% | $ 93 |
FICA - Medicare | $ 1,500 | 1.45% | $ 21.75 |
FUTA | $ 1,000 ($7,000 (-) $ 6,000) |
0.60% | $ 6 |
SUTA | $ 1,000 ($7,000 (-) $ 6,000) |
5.40% | $ 54 |
Total taxes withheld | $ 174.75 |
Date | General Journal | Debit | Credit |
Sep-30 | Payroll taxes expense | $ 174.75 | |
FICA - Social Security taxes payable | $ 93 | ||
FICA - Medicare taxes payable | $ 21.75 | ||
Federal unemployment taxes payable | $ 6 | ||
State unemployment taxes payable | $ 54 | ||
(To record the Payroll taxes expense and its related liabilities) |