Find the employer’s FICA deduction for each of the following employees.Find the amounts of the FUTA taxes for the current pay period for each of the following employees.Decimals for categories SS-0.062, Medicare-0.0145, (FUTA-0.0006 -$7000Cap) Show workEmployeesYear-to-DateCurrent GrossSocial Security (0.062)Medicare(0.0145)Subject to FUTA(0.006)FUTAF. Todd$6959.28$1088.64 T. Stanley$7,882.51$827.44 11:02ll LTE155+Section 9.2 Find Employer Payroll T155maintain their own unemployment programs by making the federal unemployment tax rate that acompany pays depend on their state unemployment tax obligation.Employers are required to pay both federal and state unemployment taxes. The official 2018FUTA rate is 6.0% of the first $7,000 of each employee's gross earnings in each year.If the employer pays it on time each quarter before FUTA taxes are due, the employer canreduce the FUTA tax burden to 0.6%. This is because in all states except for "credit reductionstates," the Federal government allows a credit of 5.4% to offset what the employer pays in stateunemployment taxes. This means the maximum FUTA liability for many businesses is $42 peremployee ($7,000 * 0.6% = $42). It doesn't matter what the state tax rate is – the federal tax credit isthe same. However, the SUTA tax will vary depending on the state.We will assume that all employers have reduced their tax burden to 0.6% for FUTA.Federal Unemployment Tax (FUTA) SummaryImportant FactsA Unemployment taxes are paid solely by the employer. They are not deducted from anemployee's pay.A The federal government does not pay any unemployment benefits.A Unemployment benefits come from State Unemployment Taxes (SUTA).A The employer will pay 0.6% of the first $7000 of each employee's annual pay to FUTA.Each FUT problem involves two steps:1. Finding how much of the current gross is subject to FUTA.A Subtract the year-to-date from $7000.o If this amount is more than the gross, the entire gross is taxed.o If this amount is less than the gross, this is the amount taxed.A If the year-to-date is already more than $7000, then $0 is subject to FUTA and the FUTAitself is $0.2. Finding how much the employer will pay in FUTA for that amount.Possibility A.The entire gross earnings are taxed.Jake Johnson has a year-to-date of $4789. His gross this pay period is $789.7000 – 4789 = 2211 which is more than 789, so 789 is taxed.789(0.006) = $4.73 FUTAPossibility B.The employee will go over $7000 this pay period.Judy Jackson has a year-to-date of $5997. Her gross this pay period is $1456.7000 – 5997 = 1003 which is less than 1456 so 1003 is subject to FUTA.1003(0.006) = 6.02 FUTAPossibility C.The employee has already gone over $7000.Paul Paulson has a year-to-date of $10,567. His current gross is $2367.Because his year-to-date is greater than $7000, $0 is subject to FUTA and the FUTA is $0.p. 155

Federal Unemployment Taxes (FUTA) The threshold limit for the Federal Unemployment taxes (FUTA) is $…

Answered: Find the employer’s FICA deduction for…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 10PB: Use Figure 12.15 to complete the following problem. Roland Inc. employees monthly gross pay...

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Use Figure 12.15 to complete the following problem. Roland Inc. employees monthly gross pay information and their W-4 Form withholding allowances follow. Rolands payroll deductions include FICA Social Security at 6.2%, FICA Medicare at 1.45%, FUTA at 0.6%, SUTA at 5.4%, federal income tax (based on withholdings table) of gross pay, state income tax at 3% of gross pay, and health insurance coverage premiums of $1,000 split 50% employees and 50% employer. Assume each employee files as single, gross income is the same amount each month, October is the first month of business operation for the company, and salaries have yet to be paid. Record the entry or entries for accumulated employee and employer payroll for the month of October; dated October 31.
Payroll accounts and year-end entries The following accounts, with the balances indicated, appear in the ledger of Garcon Co. on December 1 of the current year: 211 Salaries Payable 212 Social Security Tax Payable 9,273 213 Medicare Tax Payable 2,318 214 Employees Federal Income Tax Payable 15,455 215 Employees State Income Tax Payable 13,909 216 State Unemployment Tax Payable 1,400 217 Federal Unemployment Tax Payable SOO 218 Retirement Savings Deductions Payable 3,400 219 Medical Insurance Payable 27r000 411 Operations Salaries Expense 950.000 S11 Officers Salaries Expense 600,000 SI 2 Office Salaries Expense 150.000 S19 Payroll Tax Expense 137,951 The following transactions relating to payroll, payroll deductions, and payroll taxes occurred during December: Dec. 2. Issued Check No. 410 for 53,400 to Jay Bank to invest in a retirement savings account for employees. 2. Issued Check No. 411 to Jay Bank for 527,046, in payment of 59,273 of social security tax, 2,318 of Medicare tax, and 15,455 of employees federal income tax due. 13 Journalized the entry to record the biweekly payroll. A summary of the payroll record follows: Dec. 13. Issued Check No. 420 in payment of the net amount of the biweekly payroll to fund the payroll bank account. 13. Journalized the entry to record payroll taxes on employees' earnings of December 13: social security tax. 4,632; Medicare tax, 1,158; state unemployment tax. 350; federal unemployment tax, 125. 16. Issued Check No. 424 to Jay Bank for 27,020. in payment of 9,264 of social security tax, 2,316 of Medicare tax, and 15,440 of employees' federal income tax due. 19. Issued Check No. 429 to Sims-Walker Insurance Company for 31,500, in payment of the semiannual premium on the group medical insurance policy. 27. Journalized the entry to record the biweekly payroll. A summary of the payroll 27. Issued Check No. 541 in payment of the net amount of the biweekly payroll to fund the payroll bank account. 27. Journalized the entry to record payroll taxes on employees' earnings of December 27: social security tax, 4,668; Medicare tax. 1,167: state unemployment tax, 225; federal unemployment tax, 75. 27. Issued Check No. 543 for 20,884 to State Department of Revenue in payment of employees' state income tax due on December 31. 31. Issued Check No. 545 to Jay Bank for 3400 to invest in a retirement savings account for employees. 31. Paid 45,000 to the employee pension plan. The annual pension cost is 60,000. (Record both the payment and unfunded pension liability.) Instructions 1. Journalize the transactions. 2. Journalize the following adjusting entries on December 31: a. Salaries accrued: operations salaries, 8,560; officers salaries, 5,600: office salaries, 1,400. The payroll taxes are immaterial and are not accrued. b. Vacation pay, 15,000.

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