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Payroll Accounting

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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