Solved by verified expert :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 $7,000earned 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
