Question

Merger Co. has 10 employees, each of whom earns $2,000 per month and has been employed since January 1. FICA Social Security taxes are 6.2% of the first $128,400 paid to each employee. and FICA Medicare taxes are 1.45% of gross pay. FUTA taxes are 0.6% and SUTA taxes are 5.4% of the first $7,000 paid to each employee. Prepare the March 31 journal entry to record the March payroll taxes expenses.

Answer 1

Journal Entry to record the payroll taxes expenses on March 31.

Date	Account Titles and Explanations	Debit	Credit
Mar. 31	Payroll Tax Expenses ($1,240 + $290 + $120 + $1,080)	$2,730
	FICA - Social Security Taxes Payable ($2,000*10 employees * 6.2/100)		$1,240
	FICA - Medicare Taxes Payable ($2,000*10 employees * 1.45/100)		$290
	Federal Unemployment Taxes Payable ($2,000*10 employees * 0.6/100)		$120
	State Unemployment Taxes Payable ($2,000*10 employees * 5.4/100)		$1,080
	(To record the employer's payroll taxes Expense)