Question

[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

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
			$0.00

Answer 1

	Employer Payroll taxes September earnings subject to tax (i) Tax Rate (ii) Tax Amount (i) x (ii) FICA Social Security taxes 800 6.2% 49.60 FICA Medicare taxes 800 1.45% 11.60 FUTA taxes 200 0.6% 1.20 SUTA taxes 200 2.9% 5.80 $68.20

Journal

Sep. 30	Payroll tax expense	68.20
	FICA -Social security tax payable		49.60
	FICA - Medicare tax payable		11.60
	FUTA Taxes Payable		1.20
	SUTA Taxes Payable		5.80