Question

QS 9-8 (Algo) Recording employer payroll taxes LO P3 Merger Co. has 10 employees, each of whom earns $1,700 per month and has been employed since January 1. FICA Social Security taxes are 6.2% of the first $132,900 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 expense. (Round your answers to 2 decimal places.)

Answer 1

Answer:

Dr Payroll Tax Expense: $2,321

Cr FICA- Social security taxes payable $1,054

Cr FICA- Medicare taxes payable $247

Cr SUTA-State unemployment taxes payable $918

Cr FUTA- Federal unemployment taxes payable $102

Explanation:

Preparation of the March 31 journal entry to record the March payroll taxes expense

March 31

Dr Payroll Tax Expense: $2,321

($1,054+$247+$918+$102)

Cr FICA- Social security taxes payable $1,054

[($1,700*10)*6.2%]

Cr FICA- Medicare taxes payable $247

[($1,700*10)*1.45%]

Cr SUTA-State unemployment taxes payable $918

[($1,700*10)*5.4%]

Cr FUTA- Federal unemployment taxes payable $102

[($1,700*10)*0.6%]

(To record payroll taxes expense)