Suppose that the following tax rates and payroll

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Reference no: EM13452923

Assume that the following tax rates and payroll information pertain to Brookhaven Publishing:

Social Security taxes: 6% 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: 5% 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.

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

Reference no: EM13452923

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