Question

a company has 10 employees, each of whom earns $1,900 per month and has been employed since january 1. all wages for this period are subject to 6.2% fica social security taxes and 1.45% fica medicare taxes. futa taxes are 0.6% and suta taxes are 5.4% of the first $7,000 paid to each employee. prepare the february 28 journal entry to record the february payroll taxes expense. note: round your answers to 2 decimal places. view transaction list journal entry worksheet 1 record employer payroll taxes. note: enter debits before credits. date general journal debit credit february 28

Explanation:

Step1: Calculate monthly wages for all employees

$10\times1900 = 19000$

Step2: Calculate FICA - Social Security tax expense

$19000\times6.2\%=19000\times0.062 = 1178.00$

Step3: Calculate FICA - Medicare tax expense

$19000\times1.45\%=19000\times0.0145 = 275.50$

Step4: Determine if SUTA and FUTA are applicable

Since $1900\times2 = 3800<7000$, SUTA and FUTA are calculated on the full February - wages.

Step5: Calculate FUTA tax expense

$19000\times0.6\%=19000\times0.006 = 114.00$

Step6: Calculate SUTA tax expense

$19000\times5.4\%=19000\times0.054 = 1026.00$

Step7: Calculate total payroll - tax expense

$1178.00 + 275.50+114.00 + 1026.00=2593.50$

Answer:

Date	General Journal	Debit	Credit
February 28	FICA - Social Security Taxes Payable		$1178.00$
February 28	FICA - Medicare Taxes Payable		$275.50$
February 28	FUTA Taxes Payable		$114.00$
February 28	SUTA Taxes Payable		$1026.00$