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 $128,400 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 5.4% of the first $7,000 paid to its employee.

	Gross Pay through August 31					Gross Pay for September
a.		$	6,100				$	1,400
b.			2,800					2,900
c.			123,700					9,600

rev: 05_16_2019_QC_CS-168714

Exercise 9-5 Computing payroll taxes LO P2, P3

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.)

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 $128,400 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 5.4% of the first $7,000 paid to its employee. Gross Pay through August 31 $ 6,100 2,800 123,700 Gross Pay for September $1,400 2,900 9,600 Exercise 9-5 Computing payroll taxes LO P2, P3 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.) X Answer is not complete. Tax Tax Rate September Earnings Subject to Tax 1,400.00 Tax Amount $ 86.80 FICA–Social Security FICA-Medicare FUTA SUTA 1,400.00 900.00 900.00 6.20% 1.45% 0.60% 5.40% 20.30 5.40 48.60 b) Tax Tax Rate September Earnings Subject to Tax 2,900.00 Tax Amount $ 179.80 FICA-Social Security FICA-Medicare FUTA SUTA 6.20% 1.45% 2,900.00 42.05 Tax Tax Rate Tax Amount September Earnings Subject to Tax 6,100.00 9,600.00 0 FICA–Social Security FICA-Medicare FUTA SUTA $ 6.20% 1.45% 378.20 139.20

Answer 1

1
a)
Tax	September Earnings Subject to Tax	Tax Rate	Tax Amount
FICA-Social Security	1400.00	6.20%	86.80
FICA-Medicare	1400.00	1.45%	20.30
FUTA	900.00	0.60%	5.40
SUTA	900.00	5.40%	48.60
b)
Tax	September Earnings Subject to Tax	Tax Rate	Tax Amount
FICA-Social Security	2900.00	6.20%	179.80
FICA-Medicare	2900.00	1.45%	42.05
FUTA	2900.00	0.60%	17.40
SUTA	2900.00	5.40%	156.60
c)
Tax	September Earnings Subject to Tax	Tax Rate	Tax Amount
FICA-Social Security	4700.00	6.20%	291.40
FICA-Medicare	9600.00	1.45%	139.20
FUTA	0	0.60%	0.00
SUTA	0	5.40%	0.00
Note: Earnings taxable for FUTA and SUTA in (a) = 7000-6100 = $900
Note: Earnings taxable for Social Security in (c) = 128400-123700 = $4700
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	1400.00	6.20%	86.80
FICA—Medicare	1400.00	1.45%	20.30
Total taxes withheld			197.10
Date	General Journal	Debit	Credit
Sep 30	Salaries expense	1400.00
	FICA—Social Security taxes payable		86.80
	FICA—Medicare taxes payable		20.30
	Employee federal income taxes payable		90.00
	Salaries payable		1202.90
3
Employer Payroll taxes	September earnings subject to tax	Tax Rate	Tax Amount
FICA-Social Security	1400.00	6.20%	86.80
FICA-Medicare	1400.00	1.45%	20.30
FUTA	900.00	0.60%	5.40
SUTA	900.00	5.40%	48.60
Total Payroll Taxes Expense			161.10
Date	General Journal	Debit	Credit
Sep. 30	Payroll taxes expense	161.10
	FICA—Social security taxes payable		86.80
	FICA—Medicare taxes payable		20.30
	Federal unemployment taxes payable		5.40
	State unemployment taxes payable		48.60