Question

QS 11-6 Recording employer payroll taxes LO P3 Merger Co. has 10 employees, each of whom earns $1,550 per month and has been employed since January 1. FICA Social Security taxes are 6.2% of the first $128,400 paid to each employee, and FICA Medicare taxes are 1.45% of gross pay. FUTA taxes are 0.6% and SUTA taxes are 5.4% of the first $7,000 paid to each employee. Prepare the March 31 journal entry to record the March payroll taxes expenses. (Round your answers to 2 decimal places.)

Answer 1

Answer:

March 31, 202x, payroll tax expenses

Dr FICA tax (OASDI) expense 961

Dr FICA tax (Medicare) expense 224.75

Dr FUTA tax expense 93

Dr SUTA tax expense 837

    Cr FICA tax (OASDI) payable 961

    Cr FICA tax (Medicare) payable 224.75

    Cr FUTA tax payable 93

    Cr SUTA tax payable 837

Explanation:

Since we are calculating only payroll taxes, the wages expense is not included in this journal entry.

total payroll for the 10 employees = 10 x $1,550 = $15,500

each employee has accumulated earnings of $1,550 x 3 = $4,650