Required information The following information applies to the questions displaye

Question

Required information 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 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 $7000 paid to its employee. Groes Pay through Asgust S 6,488 Grass Pay foe 5 Bee 2,180 Assuming situation a, prepare the employer's September 30 journal entries to record salary expense and its related payroll liabilities for this employee. The employee's federal income taxes withheld by the employer are $80 for this pay period. (Round your enswers to 2 decimal places.) s to be Withheld From Gross Pay (Em d Taxes) September Earninge Tax Rate Tax Amount CA-Sece Securty /1 Sep 30 NoTransacton Recorded

Explanation / Answer

BMX Company Case a) Taxes to withheld from Gross Pay (Employee Paid Taxes) September Earnings Subject to Tax Tax Rate Tax Amount Federal Income Tax $                          80.00 FICA-Social Security $                                                                                   800.00 6.20% $800*6.20%=$49.60 FICA-Medicare $                                                                                   800.00 1.45% $800*1.45%=11.60 Total Tax withheld $                       141.20 General,Jouranl Entries Date Particular Amount (Dr) Amount(Cr) 30-Sep Salaries Expenses $                                        800.00     To Employee federal Income tax Payable $                          80.00     To FICA -Social Security $                          49.60     To FICA -Medicare $                          11.60     To Salaries Payable=($800-$80-$49.6-$11.60) $                       658.80 Case a) (Employer's Payroll Taxes Expense and related liabilities) September Earnings Subject to Tax Tax Rate Tax Amount FICA -Social Security $                                                                                   800.00 6.20% $800*6.20%=$49.60 FICA-Medicare $                                                                                   800.00 1.45% $800*1.45%=11.60 FUTA $                                                                                   600.00 0.60% $600*.60%=$3.60 SUTA $                                                                                   600.00 2.90% $600*2.90%=$17.40 Total Payroll Taxes Expense $                          82.20 General,Jouranl Entries Date Particular Amount (Dr) Amount(Cr) 30-Sep Payroll Taxes Expense $                                           82.20     To FICA-Social Security $                          49.60     To FICa-Medicare $                          11.60      To FUTA(Federal Unemployment tax payable) $                            3.60      TO SUTA(State Unemployment Tax Payable) $                          17.40 Working for earnings subject to tax for FUTA and SUTA Gross Pay through september=($6400+$800) $                                     7,200.00 Unemployment limit $                                     7,000.00 Earnings above limit (Exempt) $                                        200.00 Current Earnings $                                        800.00 Less: Exempt from Unemployment Tax $                                        200.00 Subject to tax $                                        600.00

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