Question

Required information

Use the following information for the Exercises below.

[The following information applies to the questions displayed below.]

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.		$	6,400				$	1,700
b.			20,100					4,000
c.			114,100					9,900

Exercise 11-7 Payroll-related journal entries LO P3

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.)

Answer 1

S.no.	Accounts title and explanations				Debit $	Credit $
Case-a
	Employer payroll tax expenses Account				151.05
	FICA Social Security tax payable					105.4	(1700*6.2%0
	FICA Medicare tax payable					24.65	(1700*1.455)
	Federal Unemployment tax payable					3.6	(600*0.60%)
	State Unemployment tax payable					17.4	(600*2.90%)
Case-b	Employer payroll tax expenses Account				306
	FICA Social Security tax payable					248	(4000*6.20%)
	FICA Medicare tax payable					58	(4000*1.45%)
Case-c	Employer payroll tax expenses Account				336.6
	FICA Social Security tax payable					272.8	(4400*6.20%)
	FICA Medicare tax payable					63.8	(4400*1.45%)