Question

According to a summary of the payroll of Murtagh Co., $750,000 was subject to the 6.0% social security tax and the 1.5% Medicare tax. Also, $50,000 was subject to state and federal unemployment taxes.

Calculate the employer's payroll taxes, using the following rates: state unemployment, 5.4%; federal unemployment, 0.8%.

Journalize the entry to record the accrual of payroll taxes.

Answer 1

	Taxable amount	Tax
Social security tax	750000	45000
Medicare tax	750000	11250
State unemployment tax	50000	2700
Federal unemployment tax	50000	400
Employer's payroll taxes		59350
b
Payroll tax expense	59350
Social security tax payable		45000
Medicare tax payable		11250
State unemployment tax payable		2700
Federal unemployment tax payable		400