Question

Calculation and Journal Entry for Employer Payroll Taxes 1. Calculate the employer's payroll taxes expense. Round your answer to the nearest cent. 2. Prepare the journal entry as of March 12, 20-, assuming that FUTA tax is 0.6%, SUTA tax is 5.4%, Social Security tax is 6.2%, and Medicare tax is 1.45%. 1f required, round your answers to the nearest cent. If an amount box does not require an entry, leave it blank. Earnings for several employees for the week ended March 12, 20-, are as follows: Taxable Earnings Current UnemploymentSocial Aus, Glenn E Diaz, Charles K. Knapp, Carol S. Mueller, Deborah F Yeager, Jackie R Employee NameEarnings CompensationSecurity $680 350 1,200 810 920 $680 350 1,200 810 920 $200 340 115 35

Answer 1

Particulars	Medicare earnings	FUTA earnings	SUTA earnings	Social security earnings
Aus, Glenn E.	680	200	200	680
Diaz, Charles K.	350	340	340	350
Knapp, Carol S.	1,200	-	-	1,200
Mueller, Deborah F.	810	115	115	810
Yeager, Jackie R.	920	35	35	920
Taxablw wages	3,960	690	690	3,960
Tax rate	1.45%	0.60%	5.40%	6.20%
Tax	57.42	4.14	37.26	245.52

Journal:

Account	Debit	Credit
Payroll tax expense	344.34
Medicare payable		57.42
FUTA Payable		4.14
SUTA Payable		37.26
Social security payable		245.52

Note:

Medicare: all earnings of the employees are subject to 1.45% medicare tax. hence, current earnings amount is taken to calculate tax amount.

FUTA and SUTA: there are income limits on which unemployment taxes are payable. Wages subject to tax given in the problem is used.

Social security: like unemployment taxes, social security taxable wages are used in calculating the amount of tax.