Question 5: 10% points: Alpha Company has a January 15 mid-monthgross salaries expense of $25,000. All is subject to FICA SocialSecurity (6.2%), FICA Medicare (1.45%), state income tax (5%) andfederal income tax (15%) withholdings. Additionally, all is subjectto employer taxes to include FUTA (0.8%) and SUTA (5.4%) taxes.(Round all calculations to the nearest penny.) Required: a. Preparethe general journal entry to record the employer's payrollliability to the employee salaries. b. Prepare the general journalentry to record the employer's payroll tax liability. c. Preparethe general journal entry to liquidate the liabilities accrued inparts (a) and (b) on January 22.
Question 5: 10% points: Alpha Company has a January 15 mid-monthgross salaries expense of $25,000. All is subject to FICA SocialSecurity (6.2%), FICA Medicare (1.45%), state income tax (5%) andfederal income tax (15%) withholdings. Additionally, all is subjectto employer taxes to include FUTA (0.8%) and SUTA (5.4%) taxes.(Round all calculations to the nearest penny.) Required: a. Preparethe general journal entry to record the employer's payrollliability to the employee salaries. b. Prepare the general journalentry to record the employer's payroll tax liability. c. Preparethe general journal entry to liquidate the liabilities accrued inparts (a) and (b) on January 22.
Related questions
BMX Company has one employee. FICA Social Security taxes are 6.2% of the first $118,500 paid to its employee, and FICA 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 $7,000 paid to its employee.
| Gross Pay through August | Gross Pay for September | |
| a. | $ 6,400 | $ 800 |
| b. | $ 18,200 | $ 2,100 |
| c. | $ 112,200 | $ 8,000 |
Compute BMXâs amounts for each of these four taxes as applied to the employeeâs gross earnings for September under each of three separate situations (a), (b), and (c). (Round your answers to 2 decimal places.)
a.)
| Tax | September Earnings Subject to Tax | Tax Rate | Tax Amount |
| FICA-Social Security | |||
| FICA-Medicare | |||
| FUTA | |||
| SUTA |
b.)
| Tax | September Earnings Subject to Tax | Tax Rate | Tax Amount |
| FICA-Social Security | |||
| FICA-Medicare | |||
| FUTA | |||
| SUTA |
c.)
| Tax | September Earnings Subject to Tax | Tax Rate | Tax Amount |
| FICA-Social Security | |||
| FICA-Medicare | |||
| FUTA | |||
| SUTA |
d.) Assuming situation a, prepare the employerâs September 30 journal entries to record salary expense and its related payroll liabilities for this employee. The employeeâs federal income taxes withheld by the employer are $80 for this pay period. (Round your answers to 2 decimal places.)
Taxes to be Withheld From Gross Pay (Employee-Paid Taxes)
| September Earnings Subject to Tax | Tax Rate | Tax Amount | |
| Federal income tax | |||
| ------------------------- | ---------------------------------------------- | ----------- | Total: |
e. Prepare the employer's September 30 journal entry to record accrued salary expense and its related payroll liabilities for this employee.
| DATE | GENERAL JOURNAL | DEBIT | CREDIT |
| Sep 30 | |||
f.) Assuming situation a, prepare the employerâs September 30 journal entries to record the employerâs payroll taxes expense and its related liabilities. (Round your answers to 2 decimal places.)
| Employer Payroll Taxes | September earnings subject to tax | Tax Rate | Tax Amount |
| ------------------------------ | --------------------------------------------- | ----------- | Total: |
g.)
| DATE | GENERAL JOURNAL | DEBIT | CREDIT |
| Sep 30 | |||
Paloma Co. has four employees. FICA Social Security taxes are 6.2% of the first $118,500 paid to each employee, and FICA Medicare taxes are 1.45% of gross pay. Also, for the first $7,000 paid to each employee, the companyâs FUTA taxes are 0.6% and SUTA taxes are 2.15%. The company is preparing its payroll calculations for the week ended August 25. Payroll records show the following information for the companyâs four employees.
| Current Week | ||||||||||||||
| Name | Gross Pay through Aug. 18 | Gross Pay | Income Tax Withholding | |||||||||||
| Dali | $ | 115,800 | $ | 3,600 | $ | 511 | ||||||||
| Trey | 116,450 | 2,050 | 330 | |||||||||||
| Kiesha | 8,700 | 610 | 53 | |||||||||||
| Chee | 2,650 | 560 | 42 | |||||||||||
In addition to gross pay, the company must pay one-half of the $92 per employee weekly health insurance; each employee pays the remaining one-half. The company also contributes an extra 8% of each employeeâs gross pay (at no cost to employees) to a pension fund.
Required:
Compute the following for the week ended August 25. (Round your intermediate calculations and final answers to 2 decimal places.):
| 1) Employees' FICA Withholdings for Social Security | ||||||||||
| Employee | Earnings Subject to Tax | Tax Rate | Tax Amount | |||||||
| Dali | ||||||||||
| Trey | ||||||||||
| Kiesha | ||||||||||
| Chee | ||||||||||
| Total | $0.00 | |||||||||
| 2) Employees' FICA Withholdings for Medicare | ||||||||||
| Employee | Earnings Subject to Tax | Tax Rate | Tax Amount | |||||||
| Dali | ||||||||||
| Trey | ||||||||||
| Kiesha | ||||||||||
| Chee | ||||||||||
| Total | $0.00 | |||||||||
| 3) Employer's FICA Taxes for Social Security | ||||||||||
| Employee | Earnings Subject to Tax | Tax Rate | Tax Amount | |||||||
| Dali | ||||||||||
| Trey | ||||||||||
| Kiesha | ||||||||||
| Chee | ||||||||||
| Total | $0.00 | |||||||||
| 4) Employer's FICA Taxes for Medicare | ||||||||||
| Employee | Earnings Subject to Tax | Tax Rate | Tax Amount | |||||||
| Dali | ||||||||||
| Trey | ||||||||||
| Kiesha | ||||||||||
| Chee | ||||||||||
| Total | $0.00 | |||||||||
| 5) Employer's FUTA Taxes | ||||||||||
| Employee | Earnings Subject to Tax | Tax Rate | Tax Amount | |||||||
| Dali | ||||||||||
| Trey | ||||||||||
| Kiesha | ||||||||||
| Chee | ||||||||||
| Total | $0.00 | |||||||||
| 6) Employer's SUTA Taxes | ||||||||||
| Employee | Earnings Subject to Tax | Tax Rate | Tax Amount | |||||||
| Dali | ||||||||||
| Trey | ||||||||||
| Kiesha | ||||||||||
| Chee | ||||||||||
| Total | $0.00 | |||||||||
| 7) Each Employee's Net (take-home) Pay | ||||||||||
| Employee | Dali | Trey | Kiesha | Chee | Total | |||||
| Gross Pay | $3,600.00 | $2,050.00 | $610.00 | $560.00 | $6,820.00 | |||||
| Income tax withholding | 511.00 | 330.00 | 53.00 | 42.00 | 936.00 | |||||
| FICA - Social Security | 0.00 | |||||||||
| FICA - Medicare | 0.00 | |||||||||
| Health Insurance | 0.00 | |||||||||
| Net Pay | $0.00 | |||||||||
| 8) Total Payroll Related Expense for Each Employee | ||||||||||
| Employee | Dali | Trey | Kiesha | Chee | Total | |||||
| Gross Pay | $3,600.00 | $2,050.00 | $610.00 | $560.00 | $6,820.00 | |||||
| FICA - Social Security | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||
| FICA - Medicare | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||
| FUTA | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||
| SUTA | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||||
| Health Insurance | 0.00 | |||||||||
| Pension | 0.00 | |||||||||
| Total Payroll Expense | $3,600.00 | $2,050.00 | $610.00 | $560.00 | $6,820.00 | |||||
