BMX Company has one employee. FICA Social Security taxes are 6.2% of the first $137,700 paid to its employee, and FICAMedicare taxes are 1.45% of gross pay. For BMX, its FUTA taxes are 0.6% and SUTA taxes are 5.4% of the first $7,000 paidto its employee.Gross Pay throughAugust 31$ 6,7002,300131,700Gross Pay forSeptember$ 4002,4008,300a.b.c.Assuming situation (a), prepare the employer's September 30 journal entry to record the employer's payroll taxes expense and itsrelated liabilities. BMX Company has one employee. FICA Social Security taxes are 6.2% of the first $137,700 paid to its employee, and FICAMedicare taxes are 1.45% of gross pay. For BMX, its FUTA taxes are 0.6% and SUTA taxes are 5.4% of the first $7,000 paidto its employee. ,Gross Pay throughAugust 31$ 6,7002,300131,700Gross Pay forSeptember$ 400a.b.2,4008,300C.Assuming situation (a), prepare the employer's September 30 journal entry to record salary expense and its related payroll liabilities forthis employee. The employee's federal income taxes withheld by the employer are $90 for this pay period.

Payroll refers to the desired sum of money provided by the employer to its employees the job done by…

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Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter9: Payroll, Estimated Payments, And Retirement Plans

Section: Chapter Questions

Problem 16MCQ

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Lemur Corp. is going to pay three employees a year-end bonus. The amount of the year-end bonus and the amount of federal income tax withholding are as follows. Lemurs 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 as previously shown, state income tax at 5% of gross pay, and 401(k) employee contributions at 2% of gross pay. Record the entry for the employee payroll on December 31.
Payrex Co. has six employees. All are paid on a weekly basis. For the payroll period ending January 7, total employee earnings were 12,500, all of which were subject to SUTA, FUTA, Social Security, and Medicare taxes. The SUTA tax rate in Payrexs state is 5.4%, but Payrex qualifies for a rate of 2.0% because of its good record of providing regular employment to its employees. Other employer payroll taxes are at the rates described in the chapter. REQUIRED 1. Calculate Payrexs FUTA, SUTA, Social Security, and Medicare taxes for the week ended January 7. 2. Prepare the journal entry for Payrexs payroll taxes for the week ended January 7. 3. What amount of payroll taxes did Payrex save because of its good employment record?
An employee earns $8,000 in the first pay period. The FICA Social Security Tax rate is 6.2%, and the FICA Medicare tax rate is 1.45%. What is the employees FICA taxes responsibility? A. $535.50 B. $612 C. None, only the employer pays FICA taxes D. $597.50 E. $550
Toren Inc. employs one person to run its solar management company. The employees gross income for the month of May is $6,000. Payroll for the month of May is as follows: FICA Social Security tax rate at 6.2%, FICA Medicare tax rate at 1.45%, federal income tax of $400, state income tax of $75, health-care insurance premium of $200, and union dues of $50. The employee is responsible for covering 30% of his or her health insurance premium. A. Record the journal entry to recognize employee payroll for the month of May, dated May 31, 2017. B. Record remittance of the employees salary with cash on June 1.
Marc Associates employs Janet Evanovich at its law firm. Her gross income for June is $7,500. Payroll for the month of June follows: federal income tax of $650, state income tax of $60, local income tax of $30, FICA Social Security tax rate at 6.2%, FICA Medicare tax rate at 1.45%, health-care insurance premium of $300, donations to a charity of $50, and pension plan contribution of $200. The employee is responsible for covering 40% of his or her health insurance premium. A. Record the journal entry to recognize employee payroll for the month of June; dated June 30, 2017. B. Record remittance of the employees salary with cash on July 1.

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