Calculation and Journal Entry for Employer Payroll Taxes 1. Calculate the employ

Question

Calculation and Journal Entry for Employer Payroll Taxes 1. Calculate the employer's payroll taxes expense. Round your answer to the nearest cent. 2. Prepare the journal entry as of March 12, 20-, assuming that FUTA tax is 0.6%, SUTA tax is 5.4%, Social Security tax is 6.2%, and Medicare tax is 1.45%. 1f required, round your answers to the nearest cent. If an amount box does not require an entry, leave it blank. Earnings for several employees for the week ended March 12, 20-, are as follows: Taxable Earnings Current UnemploymentSocial Aus, Glenn E Diaz, Charles K. Knapp, Carol S. Mueller, Deborah F Yeager, Jackie R Employee NameEarnings CompensationSecurity $680 350 1,200 810 920 $680 350 1,200 810 920 $200 340 115 35

Explanation / Answer

Journal:

Note:

Medicare: all earnings of the employees are subject to 1.45% medicare tax. hence, current earnings amount is taken to calculate tax amount.

FUTA and SUTA: there are income limits on which unemployment taxes are payable. Wages subject to tax given in the problem is used.

Social security: like unemployment taxes, social security taxable wages are used in calculating the amount of tax.

Particulars Medicare earnings FUTA earnings SUTA earnings Social security earnings Aus, Glenn E.                            680                     200                     200                                      680 Diaz, Charles K.                            350                     340                     340                                      350 Knapp, Carol S.                         1,200                        -                          -                                    1,200 Mueller, Deborah F.                            810                     115                     115                                      810 Yeager, Jackie R.                            920                       35                       35                                      920 Taxablw wages                         3,960                     690                     690                                  3,960 Tax rate 1.45% 0.60% 5.40% 6.20% Tax 57.42 4.14 37.26 245.52

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