Question

# Required information Use the following information for the Exercises below. [The following information applies to the...

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 \$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

Exercise 9-5 Computing payroll taxes LO P2, P3

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 800 6.20% 49.60 FICA-Medicare 800 1.45% 11.60 FUTA 600 0.60% 3.60 SUTA 600 2.90% 17.40 b) Tax September Earnings Subject to Tax Tax Rate Tax Amount FICA-Social Security 2100 6.20% 130.20 FICA-Medicare 2100 1.45% 30.45 FUTA 0 0.60% 0.00 SUTA 0 2.90% 0.00 c) Tax September Earnings Subject to Tax Tax Rate Tax Amount FICA-Social Security 6300 6.20% 390.60 FICA-Medicare 8000 1.45% 116.00 FUTA 0 0.60% 0.00 SUTA 0 2.90% 0.00 Note: Earnings taxable for FUTA and SUTA in (a) = 7000-6400 = \$600 Note: Earnings taxable for Social Security in (c) = 118500-112200 = \$6300