BMX Company has one employee. FICA Social Security taxes are 6.2% of the first $118,500 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 2.9% of the first $7,000 paid to its employee.
Gross Pay through August Gross Pay for September
a. $ 6,400 $ 800
b. $ 18,200 $ 2,100
c. $ 112,200 $ 8,000
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.)
a.)
Tax September Earnings Subject to Tax Tax Rate Tax Amount
FICA-Social Security
FICA-Medicare
FUTA
SUTA
b.)
Tax September Earnings Subject to Tax Tax Rate Tax Amount
FICA-Social Security
FICA-Medicare
FUTA
SUTA
c.)
Tax September Earnings Subject to Tax Tax Rate Tax Amount
FICA-Social Security
FICA-Medicare
FUTA
SUTA
d.) Assuming situation a, prepare the employer’s September 30 journal entries to record salary expense and its related payroll liabilities for this employee. The employee’s federal income taxes withheld by the employer are $80 for this pay period. (Round your answers to 2 decimal places.)
Taxes to be Withheld From Gross Pay (Employee-Paid Taxes)
September Earnings Subject to Tax Tax Rate Tax Amount
Federal income tax
------------------------- ---------------------------------------------- ----------- Total:
e. Prepare the employer's September 30 journal entry to record accrued salary expense and its related payroll liabilities for this employee.
DATE GENERAL JOURNAL DEBIT CREDIT
Sep 30
f.) 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.)
Employer Payroll Taxes September earnings subject to tax Tax Rate Tax Amount
------------------------------ --------------------------------------------- ----------- Total:
g.)
DATE GENERAL JOURNAL DEBIT CREDIT
Sep 30
