ACC 205 Week 4 Exercise 2 Payroll accounting

ACC 205 Week 4 Exercise 2 Payroll accounting

Product Description

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

• Social Security taxes: 6% on the first $55,000 earned
• Medicare taxes: 1.5% on the first $130,000 earned
• 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
• Federal unemployment taxes: 0.8% on the first $7,000 earned

The company incurred a salary expense of $50,000 during February. All employees had earned less than $5,000 by month-end.

1. 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

1. Prepare the journal entry to record Brookhaven’s payroll tax expense. The entry will include the following:

 

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