Chapter 9, Problem 3SEA

CALCULATION OF TAXABLE EARNINGS AND EMPLOYER PAYROLL TAXES AND PREPARATION OF JOURNAL ENTRY Selected information from the payroll register of Joanie’s Boutique for the week ended September 14, 20--, is as follows. Social Security tax is 6.2% on the first $118,500 of earnings for each employee. Medicare tax is 1.45% of gross earnings. FUTA tax is 0.6% and SUTA tax is 5.4% on the first $7,000 of earnings.

Calculate the amount of taxable earnings for unemployment. Social Security, and Medicare taxes, and prepare the journal entry to record the employer’s payroll taxes as of September 14, 20--.