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CALCULATION OF TAXABLE EARNINGS AND EMPLOYER PAYROLL TAXES AND PREPARATION OF JOURNAL ENTRIES: Selected information from...

CALCULATION OF TAXABLE EARNINGS AND EMPLOYER PAYROLL TAXES AND PREPARATION OF JOURNAL ENTRIES: Selected information from the payroll register of Joanie’s boutique for the week ended September 14, 2013 is as follows. Social Security tax is 6.2% on the first $110,100 of earnings for each employee. Medicare tax is 1.45% of gross earnings. FUTA tax is 0.8% and SUTA tax is 3.2% on the first $7,000 of earnings for each employee.

                                                                                                            Taxable Earnings

                                    Cumulative Pay

                                    Before Current Current            Unemployment Social

Employee                      Earnings                       Gross Pay         Compensation   Security

Jordahl, S.                    $      6,600                     $1,190

Keesling, E.                          6,150                     1,070

Palmer, S.                          55,200                     2,410

Soltis, R.                             54,300                     2,280                         

Stout, H.                            29,050                     2,030

Xia, X.                  108,230                     2,850

Calculate the amount of taxable earnings for unemployment, Social Security and Medicare taxes, and prepare the journal entries to record the employer’s payroll taxes as of September 14, 2013.

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