The information on earnings and deductions for the pay period ended December 14 from King Company’s payroll records is as follows: For each employee, the Social Security tax is 6.2 percent of the first $118,500, and the employer’s Social Security tax is 6.2 percent on the same earnings limit. The Medicare tax is 1.45 percent on all earnings. The federal unemployment tax rate is 0.6 percent of the first $7,000 of earnings of each employee. The state unemployment tax rate is 5.4 percent of the same base. Determine the total taxable earnings for unemployment, Social Security, and Medicare. Prepare a general journal entry to record the employer’s payroll taxes. Round answers to the two decimal places.

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College Accounting (Book Only): A ...

13th Edition
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Publisher: South-Western College Pub
ISBN: 9781337280570
BuyFind

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
Publisher: South-Western College Pub
ISBN: 9781337280570

Solutions

Chapter
Section
Chapter 8, Problem 4E
Textbook Problem

The information on earnings and deductions for the pay period ended December 14 from King Company’s payroll records is as follows:

Chapter 8, Problem 4E, The information on earnings and deductions for the pay period ended December 14 from King Companys

For each employee, the Social Security tax is 6.2 percent of the first $118,500, and the employer’s Social Security tax is 6.2 percent on the same earnings limit. The Medicare tax is 1.45 percent on all earnings. The federal unemployment tax rate is 0.6 percent of the first $7,000 of earnings of each employee. The state unemployment tax rate is 5.4 percent of the same base. Determine the total taxable earnings for unemployment, Social Security, and Medicare. Prepare a general journal entry to record the employer’s payroll taxes. Round answers to the two decimal places.

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Chapter 8 Solutions

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