Question

Required information

Use the following information for the Exercises below.

[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						Gross Pay for September
a.		$	6,400					$	800
b.			2,000						2,100
c.			122,100						8,000

Exercise 9-6 Payroll-related journal entries LO P2

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.

Answer 1

Taxes to be Withheld From Gross Pay (Employee-Paid Taxes)
	September Earnings Subject to Tax	Tax Rate	Tax Amount
Federal income tax			$80.00
FICA—Social Security taxes payable	$800	6.20%	$49.60
FICA—Medicare taxes payable	$800	1.45%	$11.60
Total taxes withheld	$141.20

Date	General Journal	Debit	Credit
Sep 30	Salaries expense	$1700.00
	FICA—Social Security taxes payable		$49.60
	FICA—Medicare taxes payable		$11.60
	Employee federal income taxes payable		$80.00
	Salaries payable($1,700.00-$141.20)		$1558.80