# Payroll tax entries According to a summary of the payroll of Guthrie Co., $560,000 was subject to the 6.0%social security tax and the 1.5% Medicare tax. Also,$60,000 was subject to state and federal unemployment taxes. a. Calculate the employer’s payroll taxes, using the following rates: state unemployment, 5.4%; federal unemployment, 0.6%. b. Journalize the entry to record the accrual of payroll taxes.

### Financial Accounting

15th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337272124

Chapter
Section

### Financial Accounting

15th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337272124
Chapter 11, Problem 12E
Textbook Problem
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## Payroll tax entriesAccording to a summary of the payroll of Guthrie Co., $560,000 was subject to the 6.0%social security tax and the 1.5% Medicare tax. Also,$60,000 was subject to state and federal unemployment taxes. a. Calculate the employer’s payroll taxes, using the following rates: state unemployment, 5.4%; federal unemployment, 0.6%. b. Journalize the entry to record the accrual of payroll taxes.

a.

To determine

Calculate employer’s payroll taxes.

### Explanation of Solution

Employer payroll taxes: The taxes which the employer must pay to the employees with their salaries are called employer payroll taxes. Such taxes are not withheld from employees’ gross earnings but instead they are paid by employer.

Calculate Employer’s payroll taxes.

 Particulars Amount ($) Social security tax (1) 33,600 Medicare tax (2) 8,400 State unemployment tax (3) 3,240 Federal unemployment tax (4) 360 Employer’s payroll taxes 45,600 Table (1) Working note (1): Calculate the amount of social security taxes as below: Social security taxes=$560,000×6%=$33,600 Working note (2): Calculate the amount of Medicare taxes as below: Medicare taxes payable=$560,000×1

b.

To determine

Journalize the accrual of employer payroll taxes.

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