Question

From the following information from the payroll register of Veronica's Auto Supply Store, calculate the amount of taxable earnings for unemployment and FICA tax, and prepare the journal entry to record the employer's payroll taxes as of April 30, 20--. Social Security tax is 6.2% on the first $94,200 of earnings for each employee. Medicare tax is 1.45% of gross earnings. FUTA tax is 0.8%, and SUTA tax is 5.4% each on the first $7,000 of earnings.

	Cumulative Pay	Current	Taxable Earnings
Employee Name	Before Current Earnings	Gross Pay	Unemployment Compensation	Social Security
Carnavale, Liz	$ 6,400	$1,800
O'Malley, Sean	6,850	1,800
Sarlo, Jarred	109,300	3,700
Mandel, Melissa	74,200	3,200
Davenport, Vin	27,500	1,800

Answer 1

	Cumulative Pay	Current	Taxable Earnings
Employee Name	Before Current Earnings	Gross Pay	Unemployment Compensation	Social Security
Carnavale, Liz	6400	1800	600	1800
O'Malley, Sean	6850	1800	150	1800
Sarlo, Jarred	109300	3700	0	0
Mandel, Melissa	74200	3200	0	3200
Davenport, Vin	27500	1800	0	1800
Total		12300	750	8600
Journal entry:
	Debit	Credit
Payroll tax expense	758.05
Social Security tax payable		533.20	=8600*6.2%
Medicare tax payable		178.35	=12300*1.45%
FUTA tax payable		6.00	=750*0.8%
SUTA tax payable		40.50	=750*5.4%

Workings:
Taxable earnings:
Unemployment Compensation:
Carnavale, Liz	600	=7000-6400
O'Malley, Sean	150	=7000-6850