Merger Co. has 10 employees, each of whom earns $2,150 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. (Round your answers to 2 decimal places.)

Question

America Montes

Business

6 January, 09:41

Merger Co. has 10 employees, each of whom earns $2,150 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. (Round your answers to 2 decimal places.)

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Answers (1)

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Gustavo Davila · Answer 1

Tax expenses fica Medicare = $311.75 i. e 1.45 * 21500

Futa tax. = $129 i. e. 6% * 21500

Explanation:

Salary Dr 21,500

Net salary Cr 21,059.25

Tax expenses Cr 440.75

After payment of tax

Tax expenses Dr. 440.75

Cash/Bank CR. 440.75.

Note

The fica social security tax will not count since non of the staff has earned $128, 400 as at March and the suta tax will not count since non has earned $7000 as at march.

Total salary per month is$ 2150*10 = 21500