Question

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. a. Gross Pay through August $ 5,200 18,900 112,900 Gross Pay for September $ 2,400 2,800 8,700 Compute BMX's amounts for each of these four taxes as applied to the employee's gross earnings for September under each of three separate situations (a), (b), and (c). (Round your answers to 2 decimal places.) a) Tax September Earnings Subject to Tax Tax Rate Tax Amount FICA-Social Security FICA—Medicare FUTA SUTA b) Tax ngs Subject to Tax Tax Rate Tax Amount FICA—Social Security FICA—Medicare FUTA SUTA Tax September Earnings ngs Subject to Tax Tax Rate Tax Amount FICA—Social Security FICA-Medicare FUTA SUTAI

Answer 1

a)
Tax	September Earnings Subject to Tax	Tax Rate	Tax Amount
FICA-Social Security	2400	6.20%	148.80
FICA-Medicare	2400	1.45%	34.80
FUTA	1800	0.60%	10.80
SUTA	1800	2.90%	52.20
b)
Tax	September Earnings Subject to Tax	Tax Rate	Tax Amount
FICA-Social Security	2800	6.20%	173.60
FICA-Medicare	2800	1.45%	40.60
FUTA	0	0.60%	0.00
SUTA	0	2.90%	0.00
c)
Tax	September Earnings Subject to Tax	Tax Rate	Tax Amount
FICA-Social Security	5600	6.20%	347.20
FICA-Medicare	8700	1.45%	126.15
FUTA	0	0.60%	0.00
SUTA	0	2.90%	0.00
Note: Earnings taxable for FUTA and SUTA in (a) = 7000-5200 = $1800
Note: Earnings taxable for Social Security in (c) = 118500-112900 = $5600
2
Taxes to be Withheld From Gross Pay (Employee-Paid Taxes)
	September Earnings Subject to Tax	Tax Rate	Tax Amount
Federal income tax			90.00
FICA—Social Security	2400	6.20%	148.80
FICA—Medicare	2400	1.45%	34.80
Total taxes withheld			273.60
Date	General Journal	Debit	Credit
Sep 30	Salaries expense	2400.00
	FICA—Social Security taxes payable		148.80
	FICA—Medicare taxes payable		34.80
	Employee federal income taxes payable		90.00
	Salaries payable		2126.40
3
Employer Payroll taxes	September earnings subject to tax	Tax Rate	Tax Amount
FICA-Social Security	2400	6.20%	148.80
FICA-Medicare	2400	1.45%	34.80
FUTA	1800	0.60%	10.80
SUTA	1800	2.90%	52.20
Total Payroll Taxes Expense			246.60
Date	General Journal	Debit	Credit
Sep. 30	Payroll taxes expense	246.60
	FICA—Social security taxes payable		148.80
	FICA—Medicare taxes payable		34.80
	Federal unemployment taxes payable		10.80
	State unemployment taxes payable		52.20