Question

Zion, Inc. has one employee who has worked January - June of the current year. The employee is single, paid weekly, and claims three allowances on her W-2. The company is in a state that has no state income taxes. The FICA Social Security tax rate is 6.2 % on the first $118,500 of wages and the FICA Medicare tax rate is 1.45% on all wages. Zion, Inc.'s FUTA tax rate is 0.6 % on the first $7,000 of wages and their SUTA tax rate is 2.3% on the first $8,000 of wages. The employee's earnings thus far are as follows: Gross pay Jan - May Gross pay for June $1,200 $6,100 a) Use the information above and the IRS tax table (click to pop open) to calculate all of the taxes that should be withheld from the employees paycheck and her net pay for June. Round values to 2 decimal places if needed. Gross Pay Federal Withholding FICA-SS FICA-Medicare Net Pay

Answer 1

Solution:

Part A

Gross pay	1020
Federal withholding	57
FICA - ss	63.24	(1020*6.2%)
FICA - Medicare	14.79	(1020*1.45%)
Net pay	884.97

Part B

Date	General Journal	Debit	Credit
06/30	Salaries expense	1020
	FICA - social security taxes payable		63.24
	FICA - Medicare taxes payable		14.79
	Employee federal iincom taxes payable		57.00
	Salaries payable		884.97

Part C

FICA - ss	63.24
FICA - Medicare	14.79
FUTA	5.40	900*0.6%
SUTA	43.70	1900*2.3%
Total ER taxes	127.13

Part D

Date	General Journal	Debit	Credit
06/30	payroll taxes expense	127.13
	FICA - ss payable		63.24
	FICA- medicare payable		14.79
	FUTA payable		5.40
	SUTA payable		43.70