the following information applies to the questions displayed below. bmx company has one employee. fica…

the following information applies to the questions displayed below. 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 - 9 (algo) payroll - related journal entries lo p3\nassuming situation (a), prepare the employers september 30 journal entry to record the employers payroll taxes expense and its related liabilities.\ncomplete this question by entering your answers in the tabs below.\npayroll taxes expense general journal\nassuming situation (a), compute the payroll taxes expense. note: round your answers to 2 decimal places.\nemployer payroll taxes september earnings subject to tax tax rate tax amount

the following information applies to the questions displayed below. 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 - 9 (algo) payroll - related journal entries lo p3\nassuming situation (a), prepare the employers september 30 journal entry to record the employers payroll taxes expense and its related liabilities.\ncomplete this question by entering your answers in the tabs below.\npayroll taxes expense general journal\nassuming situation (a), compute the payroll taxes expense. note: round your answers to 2 decimal places.\nemployer payroll taxes september earnings subject to tax tax rate tax amount

Answer

Explanation:

Step1: Calculate FICA - Social Security tax

Since the cumulative pay ($6,200 + $1,600=$7,800) is still below the $137,700 limit, the September earnings subject to FICA - Social Security tax is $1,600. Tax amount = $1,600×6.2%=1,600×0.062 = 99.20$.

Step2: Calculate FICA - Medicare tax

The FICA - Medicare tax is calculated on the entire September gross pay of $1,600. Tax amount = $1,600×1.45%=1,600×0.0145 = 23.20$.

Step3: Calculate FUTA tax

The cumulative pay is below the $7,000 limit for FUTA. September earnings subject to FUTA is $1,600. Tax amount = $1,600×0.6%=1,600×0.006 = 9.60$.

Step4: Calculate SUTA tax

The cumulative pay ($6,200 + $1,600 = $7,800) is above the $7,000 limit. So, no additional SUTA tax is due in September as the $7,000 limit was already reached in previous months. Tax amount = 0.

Step5: Calculate total payroll - taxes expense

Total payroll - taxes expense = FICA - Social Security tax+FICA - Medicare tax+FUTA tax+SUTA tax = $99.20 + 23.20+9.60 + 0=132.00$.

Employer Payroll taxes September earnings subject to tax Tax Rate Tax Amount
FICA - Social Security $1,600 6.2% $99.20
FICA - Medicare $1,600 1.45% $23.20
FUTA $1,600 0.6% $9.60
SUTA 0 5.4% 0

Answer:

The total employer's payroll - taxes expense for September is $132.00$. The journal entry on September 30 would be: Debit Payroll Taxes Expense $132.00$ Credit FICA - Social Security Taxes Payable $99.20$ Credit FICA - Medicare Taxes Payable $23.20$ Credit FUTA Taxes Payable $9.60$ Credit SUTA Taxes Payable $0$