Question

Required Information [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 $ 5,490 2,450 123,899 Gross Pay for September $2,400 2,550 8.999 Assuming situation a, prepare the employer's September 30 journal entries to record the employer's payroll taxes expense and its related liabilities. Complete this question by entering your answers in the tabs below. Employer Payroll Taxes General Journal 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.) View transaction list Journal entry worksheet Record the employer's September 30 payroll taxes expense and its related liabilities. Note: Enter debits before credits Date General Journal Debit Credit Sep 30 1

Answer 1

Gross pay through August = $5,400

September earnings = $2,400

Tax base for FUTA and SUTA = $7,000

September earnings subject to FUTA and SUTA = Tax base for FUTA and SUTA - Gross pay through August

= 7,000 - 5,400

= $1,600

Employer payroll taxes	September earnings subject to tax	Tax rate	Tax amount
FICA- Social security tax	2,400	6.2%	2,400 x 6.2% = 148.8
FICA - Medicare tax	2,400	1.45%	2,400 x 1.45% = 34.8
FUTA Tax	1,600	0.6%	1,600 x 0.6% = 9.6
SUTA tax	1,600	5.4%	1,600 x 5.4% = 86.4
			$279.6

Journal

Sep.30	Payroll tax expense	$279.6
	FICA-Social security tax payable		148.8
	FICA-Medicare tax payable		34.8
	Federal Unemployment Taxes Payable		9.6
	State Unemployment Taxes Payable		86.4

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