Question

An employee's total earnings through November 14, 2006 were $6,800.

He/she earned $1,450 for the current period (Nov 15-Nov 30) and has 16% federal income tax withheld.

FICA-Social Security (6.2%)

FICA-Medicare (1.45%)

FUTA (6.2% of the first $7,000 pay)

SUTA (5.4% of the first $7,000 pay) are the rates for the current period.

For the current period prepare General Journal entries for the employer payroll taxes accrued and the associated payroll tax expense

Answer 1

Current earnings:
Payroll tx expense:
FICA Social security tax (1450*6.20%)	89.9
FICA Medicare tax payable (1450*1.45%)	21.03
FUTA (1450*0.60%)			8.7
SUTA (1450*5.40%)			78.3
Journal entries"
S.no.	Accounts title and explanations		Debit $	Credit $
a.	Payroll tax expense			197.93
	FICA Social security tax payable		89.9
	FICA Medicare tax payable			21.03
	Federal Unemployment tax payable		8.7
	State Unemployment tax payable		78.3
	(for payroll tax expense)
Note: The percentage of FUTA tax is wrongly mentioned whiel tyoing. It has been taken as 0.60%.