Question

The total wage expense for Grande Co. was $ 156 comma 000. Of this​ total, $ 32 comma 000 was above the OASDI wage base limit and not subject to this tax. All earnings are subject to Medicare​ taxes, and $ 58 comma 000 was above the federal and state unemployment wage base limits and not subject to unemployment taxes. Please calculate and journalize the total payroll tax expense for Grande Co. given the following rates and wage base​ limits:

Answer 1

Dr FICA OASDI (Social Security) tax expense $7,688

Dr FICA Medicare tax expense $2,262

Dr FUTA tax expense $588

Dr SUTA tax expense $5,586

Cr FICA OASDI (Social Security) tax payable $7,688

Cr FICA Medicare tax payable $2,262

Cr FUTA tax payable $588

Cr SUTA tax payable $5,586

Step-by-step explanation:

Federal unemployment tax 0.6% = ($156,000 - $58,000) x 0.6% = $588

State unemployment tax 5.7% = ($156,000 - $58,000) x 5.7% = $5,586

OASDI 6.2% = ($156,000 - $32,000) x 6.2% = $7,688

Medicare 1.45% = $156,000 x 1.45% = $2,262