bmx company has one employee. fica social security taxes are 6.2% of the first $137,700 paid to its…

bmx company has one employee. fica social security taxes are 6.2% of the first $137,700 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. \ngross pay through august 31 gross pay for september\na. $6,200 $1,600\nb. 2,200 2,300\nc. 133,100 9,700\nexercise 11 - 8 (algo) payroll - related journal entries lo p2\nassuming situation (a), prepare the employers september 30 journal entry to record salary expense and its related payroll liabilities for this employee. the employees federal income taxes withheld by the employer are $80 for this pay period.\ncomplete this question by entering your answers in the tabs below.\ntaxes to be withheld from gross pay general journal\nthe employees federal income taxes withheld by the employer are $80 for this pay period the taxes to be withheld from gross pay for this employee.\nnote: round your answers to 2 decimal places.\ntaxes to be withheld from gross pay (employee - paid taxes)\nseptember earnings subject to tax tax rate tax amount\nfederal income tax $ 80.00

bmx company has one employee. fica social security taxes are 6.2% of the first $137,700 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. \ngross pay through august 31 gross pay for september\na. $6,200 $1,600\nb. 2,200 2,300\nc. 133,100 9,700\nexercise 11 - 8 (algo) payroll - related journal entries lo p2\nassuming situation (a), prepare the employers september 30 journal entry to record salary expense and its related payroll liabilities for this employee. the employees federal income taxes withheld by the employer are $80 for this pay period.\ncomplete this question by entering your answers in the tabs below.\ntaxes to be withheld from gross pay general journal\nthe employees federal income taxes withheld by the employer are $80 for this pay period the taxes to be withheld from gross pay for this employee.\nnote: round your answers to 2 decimal places.\ntaxes to be withheld from gross pay (employee - paid taxes)\nseptember earnings subject to tax tax rate tax amount\nfederal income tax $ 80.00

Answer

Explanation:

Step1: Calculate FICA - Social Security tax

The employee's gross pay through August 31 is $6,200 and September gross pay is $1,600. The total gross pay is $6,200 + $1,600=$7,800. Since the FICA - Social Security tax applies to the first $137,700 of pay and $7,800 is within this limit, the FICA - Social Security tax for September is $1,600×6.2% = 1,600×0.062=$99.20.

Step2: Calculate FICA - Medicare tax

The FICA - Medicare tax is 1.45% of gross pay. For September, with a gross pay of $1,600, the FICA - Medicare tax is $1,600×1.45%=1,600×0.0145 = $23.20.

Step3: Calculate FUTA and SUTA taxes

The total pay through September is $7,800. The FUTA and SUTA taxes apply to the first $7,000 of pay. Since the pay has exceeded $7,000, the FUTA and SUTA taxes are calculated on the amount up to $7,000. The additional pay in September that is subject to FUTA and SUTA is $7,000 - $6,200=$800. FUTA tax = $800×0.6%=800×0.006 = $4.80, SUTA tax = $800×5.4%=800×0.054 = $43.20.

Step4: Determine total payroll liabilities

The total payroll liabilities are the sum of federal income tax, FICA - Social Security tax, FICA - Medicare tax, FUTA tax, and SUTA tax. Total liabilities=$80 + 99.20+23.20 + 4.80+43.20=$250.40. The salary expense is the gross pay of $1,600.

Answer:

Account Titles and Explanation Debit ($) Credit ($)
Salary Expense 1,600.00
Federal Income Taxes Payable 80.00
FICA - Social Security Taxes Payable 99.20
FICA - Medicare Taxes Payable 23.20
FUTA Taxes Payable 4.80
SUTA Taxes Payable 43.20