Question

BMX Company has one employee. FICA Social Security taxes are 6.2% of the first $127,200 paid to its employee, and FICA Medicare taxes are 1.45% of gross pay. For BMX, its FUTA taxes are 3.1% and SUTA taxes are 2.9% of the first $7,000 paid to its employee. Gross Pay through August 31 Gross Pay for September a. $ 6,400 $ 800 b. 2,000 2,100 c. 120,900 8,000 Assuming situation a, prepare the employer’s September 30 journal entries to record the employer’s payroll taxes expense and its related liabilities.

Answer 1

Employer Payroll taxes	September earnings subject to tax	Tax Rate	Tax Amount
FICA-Social Security	800	6.20%	49.60
FICA-Medicare	800	1.45%	11.60
FUTA	600	3.10%	18.60
SUTA	600	2.90%	17.40
Total Payroll Taxes Expense			97.20
Date	General Journal	Debit	Credit
Sep. 30	Payroll taxes expense	97.20
	FICA—Social security taxes payable		49.60
	FICA—Medicare taxes payable		11.60
	Federal unemployment taxes payable		18.60
	State unemployment taxes payable		17.40