Question

In: Accounting

Huxley Co.’s payroll for the month ended March 31, 2018, is summarized as follows:

Huxley Co.’s payroll for the month ended March 31, 2018, is summarized as follows:

Total wages                                                     $  14,670      

Federal income tax withheld                           $ 1,949    

All wages paid were subject to FICA. FICA tax rates were 6% each for employee and employer. In Huxley’s jurisdiction employers must also pay unemployment taxes under FUTA at a 4% rate. Huxley remits taxes on the 15th of the following month. As a result of March 2018 wages, what amounts should Huxley record in its journal entry forMarch withholdings due to IRS?

Solutions

Expert Solution

Total wages = $14,670      

Federal income tax withheld = $1,949

FICA tax rates = 6%

Hence, FICA taxes withheld from employee wages = Total wages x FICA tax rate

= 14,670 x 6%

= $880 (rounded to whole number)

As a result of March 2018 wages, Huxley should record in its journal entry for March withholdings due to IRS = Federal income tax withheld + FICA taxes withheld from employee wages

= 1,949 + 880

= $2,829 (rounded to whole number)

Exact answer may slightly differ due to rounding off.

ekkarill92 answered 2 years ago
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