Question

The payroll register of Ruggerio Co. indicates $10,500 of social security withheld and $2,625 of Medicare tax withheld on total salaries of $175,000 for the period. Earnings of $30,000 are subject to state and federal unemployment compensation taxes at the federal rate of 0.6% and the state rate of 5.4%. On December 31, provide the journal entry to record the payroll tax expense for the period.

Answer 1

DR: Payroll Tax Expense 14925

CR: Social Security Payable 10,500

CR: Medicare Payable. 2625

CR: FUTA Payable 180

CR: SUTA Payable 1620

Step-by-step explanation:

DR: Payroll Tax Expense 14925

CR: Social Security Payable 10,500

CR: Medicare Payable. 2625

CR: FUTA Payable(30,000×0.006) 180

CR: SUTA Payable(30,000×0.054) 1620

Answer 2

From the information provided

Federal rate tax of earnings = 30000 × 0.6%

= 30000 × 0.006

= 180

State rate tax of earnings = 30000 × 5.4%

= 30000 × 0.054

= 1620

Medicare taxes = 2625

Social security taxes = 10500

Total payroll tax expenses = Medicare taxes + social security taxes + state rate tax on earnings + federal rate tax on earnings

= 10500 + 2625 + 180 +1620

= $ 14925

THUS,

JOURNAL ENTRY

___Accounts_______Debit ($)____Credit ($)

Payroll Tax Expense__ 14925

Social Security Payable___________ 10,500

Medicare Payable________________2625

FUTA Payable ___________________180

SUTA Payable ___________________1620