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.		$	5,100				$	2,200
b.			18,800					2,700
c.			112,800					8,600

Assuming situation a, prepare the employer’s September 30 journal entries to record the employer’s payroll taxes expense and its related liabilities. (Round your answers to 2 decimal places.)

Record the employer's September 30 payroll taxes expense and its related liabilities.

Answer 1

Journal Entry
Date	Account Titles	Debit $	Credit $
September.30	Payroll Taxes	919.45
	FICA -Social Security Tax Payable		657.20
	FICA Medicare taxe Payable		195.75
	FUTA tax Payable		11.40
	SUTA tax Payable		55.10

Workings:
FICA -Social Security Tax	Amount $
a.	136.40	(2,200 x 6.2% )
b.	167.40	( 2,700 x 6.2% )
c.	353.40	( 118,500 - 112,800 ) x 6.2%
Total	657.20
FICA Medicare taxes	Amount $
a.	31.90	(2,200 x 1.45%)
b.	39.15	(2,700 x 1.45%)
c.	124.70	(8,600 x 1.45%)
Total	195.75
FUTA taxes	Amount $
a.	11.40	( 7,000 - 5,100 ) x 0.6%
b.	-
c.	-
Total	11.40
FUTA taxes	Amount $
a.	55.10	( 7,000 - 5,100 ) x 2.9%
b.	-
c.	-
Total	55.10