Question

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. $ 5,500 $ 2,300 b. 2,500 2,600 c. 123,100 9,000 rev: 05_16_2019_QC_CS-168714 Assuming situation (a), prepare the employer’s September 30 journal entries to record the employer’s payroll taxes expense and its related liabilities.

Answer 1

Employer Payroll taxes	September earnings subject to tax	Tax Rate	Tax Amount
FICA-Social Security	2,300	6.20%	142.60
FICA-Medicare	2,300	1.45%	33.35
FUTA (7,000 - 5,500)	1,500	0.60%	9
SUTA	1,500	5.40%	81
Total Payroll Taxes Expense			265.95
Date	General Journal	Debit	Credit
Sep. 30	Payroll taxes expense	265.95
	FICA—Social security taxes payable		142.60
	FICA—Medicare taxes payable		33.35
	Federal unemployment taxes payable		9
	State unemployment taxes payable		81

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