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Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:BMX Company has one employee. FICA Social Security taxes are 6.2% of the first $137,700 paid to its employee, and FICA
Medicare taxes are 1.45% of gross pay. For BMX, its FUTA taxes are 0.6% and SUTA taxes are 5.4% of the first $7,000 paid
to its employee.
Gross Pay through
August 31
$ 6,700
2,300
131,700
Gross Pay for
September
$ 400
2,400
8,300
a.
b.
c.
Assuming situation (a), prepare the employer's September 30 journal entry to record the employer's payroll taxes expense and its
related liabilities.

Transcribed Image Text:BMX Company has one employee. FICA Social Security taxes are 6.2% of the first $137,700 paid to its employee, and FICA
Medicare taxes are 1.45% of gross pay. For BMX, its FUTA taxes are 0.6% and SUTA taxes are 5.4% of the first $7,000 paid
to its employee. ,
Gross Pay through
August 31
$ 6,700
2,300
131,700
Gross Pay for
September
$ 400
a.
b.
2,400
8,300
C.
Assuming situation (a), prepare the employer's September 30 journal entry to record salary expense and its related payroll liabilities for
this employee. The employee's federal income taxes withheld by the employer are $90 for this pay period.
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