1. Payroll accounting. Assume that the following tax rates and payroll information pertain to Brookhaven Publishing: · Social Security taxes: 4% on the first $55,000 earned per employee · Medicare taxes: 1.5% on the first $130,000 earned per employee · Federal income taxes withheld from wages: $7,500 · State income taxes: 4% of gross earnings · Insurance withholdings: 1% of gross earnings · State unemployment taxes: 5.4% on the first $7,000 earned per employee · Federal unemployment taxes: 0.8% on the first $7,000 earned per employee The company incurred a salary expense of $50,000 during February. All employees had earned less than $5,000 by month-end and no wages have been paid during the month. a. Prepare the necessary entry to record Brookhaven’s February payroll. The entry will include deductions for the following: · Social Security taxes · Medicare taxes · Federal income taxes withheld · State income taxes · Insurance withholdings b. Prepare the journal entry to record Brookhaven’s payroll tax expense. The entry will include the following: · Matching Social Security taxes · Matching Medicare taxes · State unemployment taxes · Federal unemployment taxes
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