Question

Required information [The following information applies to the questions displayed below.) Part 1 of 3 0.62 points BMX Company has one employee. FICA Social Security taxes are 6.2% of the first $128,400 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 5.4% of the first $7,000 paid to its employee. Gross Pay for September Gross Pay through August 31 $ 6,200 2,850 123,800 a. b. $1,600 2,950 9,700 c. Compute BMX's amounts for each of these four taxes as applied to the employee's gross earnings for September under each of three separate situations (a), (b), and (c). (Round your answers to 2 decimal places.)

Answer 1

1
a)
Tax	September Earnings Subject to Tax	Tax Rate	Tax Amount
FICA-Social Security	1600	6.20%	99.20
FICA-Medicare	1600	1.45%	23.20
FUTA	800	0.60%	4.80
SUTA	800	5.40%	43.20
b)
Tax	September Earnings Subject to Tax	Tax Rate	Tax Amount
FICA-Social Security	2950	6.20%	182.90
FICA-Medicare	2950	1.45%	42.78
FUTA	2950	0.60%	17.70
SUTA	2950	5.40%	159.30
c)
Tax	September Earnings Subject to Tax	Tax Rate	Tax Amount
FICA-Social Security	4600	6.20%	285.20
FICA-Medicare	9700	1.45%	140.65
FUTA	0	0.60%	0.00
SUTA	0	5.40%	0.00
Note: Earnings taxable for FUTA and SUTA in (a) = 7000-6200 = $800
Note: Earnings taxable for Social Security in (c) = 128400-123800 = $4600
2
Employer Payroll taxes	September earnings subject to tax	Tax Rate	Tax Amount
FICA-Social Security	1600	6.20%	99.20
FICA-Medicare	1600	1.45%	23.20
FUTA	800	0.60%	4.80
SUTA	800	2.90%	23.20
Total Payroll Taxes Expense			150.40
Date	General Journal	Debit	Credit
Sep. 30	Payroll taxes expense	150.40
	FICA—Social security taxes payable		99.20
	FICA—Medicare taxes payable		23.20
	Federal unemployment taxes payable		4.80
	State unemployment taxes payable		23.20