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1. Payroll accounting. Assume that the following tax rates and payroll information pertain to
$ 8.00

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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