Calculation of Taxable Earnings and Employer Payroll Taxes and Preparation of Journal Entry
Selected information from the payroll register of Joanie's Boutique for the week ended September 14, 20--, is as follows: Social Security tax is 6.2% on the first $128,400 of earnings for each employee. Medicare tax is 1.45% of gross earnings. FUTA tax is 0.6% and SUTA tax is 5.4% on the first $7,000 of earnings.
1. Calculate the amount of taxable earnings for unemployment, Social Security, and Medicare taxes.
|Social Security tax||$|
|Total employer payroll taxes||$|
2. Prepare the journal entry to record the employer's payroll taxes as of September 14, 20--.
|Social Security tax||629.30||=10150*6.2%|
|Total employer payroll taxes||903.00|
|ACCOUNT TITLE||DOC NO.||POST. REF.||DEBIT||CREDIT|
|20-- Sept. 14||Payroll tax expense||903.00|
|Social Security tax payable||629.30|
|Medicare tax payable||184.30|
|FUTA tax payable||8.94|
|SUTA tax payable||80.46|
|Unemployment taxable earnings:|
|Taxable Social Security:|