Asked by Brian Triger on Jul 06, 2024
Verified
The payroll summary for December 31 for Waters Co. revealed total earnings of $80,000. Earnings subject to 6.0% social security tax were $60,000; earnings subject to 1.5% Medicare tax were $80,000; and earnings of $3,000 were subject to 4.3% state and 0.8% federal unemployment compensation tax. Journalize the entry to record the accrual of payroll taxes.
Social Security Tax
A mandatory contribution imposed by governments to fund public programs that provide retirement benefits, disability income, and other social security services.
Medicare Tax
A federal tax deducted from employees' wages and employers' pay to fund the Medicare program.
Unemployment Compensation
Payments made by the government or a fund to unemployed workers who meet certain eligibility requirements.
- Dissect and gauge payroll in addition to its linked taxes for both the employee and the employer.
Verified Answer
TD
Thien Di HoangJul 12, 2024
Final Answer :
Payroll Tax Expense 4,953
Social Security Tax Payable ($60,000 × 6.0%) 3,600
Medicare Tax Payable ($80,000 × 1.5%)1,200State Unemployment Tax Payable ($3,000 × 4.3%)?129
Federal Unemployment TaxPayable ($3,000 × 0.8%)?24
Social Security Tax Payable ($60,000 × 6.0%) 3,600
Medicare Tax Payable ($80,000 × 1.5%)1,200State Unemployment Tax Payable ($3,000 × 4.3%)?129
Federal Unemployment TaxPayable ($3,000 × 0.8%)?24
Learning Objectives
- Dissect and gauge payroll in addition to its linked taxes for both the employee and the employer.