Question

From the following information from the payroll register of Veronica's Auto Supply Store, calculate the amount of taxable earnings for unemployment and FICA tax, and prepare the journal entry to record the employer's payroll taxes as of April 30, 20--. Social Security tax is 6.2% on the first $94,200 of earnings for each employee. Medicare tax is 1.45% of gross earnings. FUTA tax is 0.8%, and SUTA tax is 5.4% each on the first $7,000 of earnings.

	Cumulative Pay	Current	Taxable Earnings
Employee Name	Before Current Earnings	Gross Pay	Unemployment Compensation	Social Security
Carnavale, Liz	$ 6,400	$1,800
O'Malley, Sean	6,850	1,800
Sarlo, Jarred	109,300	3,700
Mandel, Melissa	74,200	3,200
Davenport, Vin	27,500	1,800

Answer 1

Account	Debit	Credit
Payroll tax and benefit expense	$    22,400.00
Social security payable		$          533.20
Medicare payable		$          178.35
FUTA payable		$              6.00
SUTA payable		$            40.50
(employer payroll tax and benefit expense)

	Employer share of taxes - Taxable earnings
Salaries and wages expense	Social security	Medicare	FUTA	SUTA
$       1,800.00	$       1,800.00	$       1,800.00	$          600.00	$          600.00
$       1,800.00	$       1,800.00	$       1,800.00	$          150.00	$          150.00
$       3,700.00	$                   -	$       3,700.00	$                   -	$                   -
$       3,200.00	$       3,200.00	$       3,200.00	$                   -	$                   -
$       1,800.00	$       1,800.00	$       1,800.00	$                   -	$                   -
$    12,300.00	$       8,600.00	$    12,300.00	$          750.00	$          750.00
× Tax rate	6.20%	1.45%	0.80%	5.40%
Tax	$          533.20	$          178.35	$              6.00	$            40.50