Question

Barbara Muller Services (BMS) pays its employees monthly. The payroll information listed below is for January 2021, the first month of BMS's fiscal year. Assume none of the employees' earnings reached $7,000 during the month.
Salaries $80,000
Federal income taxes to be withheld 16,000
Federal unemployment tax rate (after FUTA deduction) 0.80%
Social security tax rate 6.2%
Medicare tax rate 1.45%
The journal entry to record payroll for the January 2013 pay period will include a debit to payroll tax expense of:_______.
a) $13,296
b) $7,344
c) $58,656
d) $5,952

Answer 1

Answer:

The journal entry to record payroll for the January 2013 pay period will include a debit to payroll tax expense of $6,760

Explanation:

In order to calculate The journal entry to record payroll for the January 2013 pay period we would have to calculate the payroll tax expense as follows:

payroll tax expense=Federal unemployment tax rate+(Social security tax rate+medicare tax rate)*Salaries

Federal unemployment tax rate=$80,000*0.80%

Federal unemployment tax rate=$640

(Social security tax rate+medicare tax rate)*Salaries= (6.2%+ 1.45%)*$80,000

(Social security tax rate+medicare tax rate)*Salaries=$6,120

Therefore, payroll tax expense=$640+$6,120

payroll tax expense=$6,760

The journal entry to record payroll for the January 2013 pay period will include a debit to payroll tax expense of $6,760