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Business Accounting Connect Access Card for Financial Accounting: Information and Decisions

a. Employer Payroll tax expense: Apart from Gross salaries which are being offered to the employees, the employers are also required to contribute towards the taxes to the Federal and state. The FICA social security tax and Medicare tax need to be equally contributed by the employer upto the threshold limit. Apart from these taxes, the unemployment tax both for Federal and State need to be contributed by the employer till the salaries of each particular employee does not reach the threshold limit. To compute: The Payroll tax expenses of BMX in the first case. The Employer payroll tax expense is $ 109.2. The Computation of Payroll tax expenses has been made as under: Name of tax Pay Applicable (A) Tax rate (B) Tax amount [A × B] FICA Social security tax $800 6.20% $49.6 FICA Medicare tax $800 1.45% $11.6 FUTA taxes $800 3.1% $24.8 SUTA taxes $800 2.9% $23.2 Total payroll expense of employer $109.2 The FICA social security tax and Medicare tax will be applied at prescribed rate on the whole of salaries payable in the month as the threshold limit of $ 127,200 has not been reached for accumulated salaries included this month, which has been computed as $ 7,200. Apart from the above tax, the FUTA and SUTA will be applied at prescribed rate on the first $7,000 only. b. Employer Payroll tax expense: Apart from Gross salaries which are being offered to the employees, the employers are also required to contribute towards the taxes to the Federal and state. The FICA social security tax and Medicare tax need to be equally contributed by the employer up to the threshold limit. Apart from these taxes, the unemployment tax both for Federal and State need to be contributed by the employer till the salaries of each particular employee does not reach the threshold limit. To compute: The Payroll tax expenses of BMX in the second case. The Employer payroll tax expense is $ 286.65. The Computation of Payroll tax expenses has been made as under: Name of tax Pay Applicable (A) Tax rate (B) Tax amount [A × B] FICA Social security tax $2,100 6.20% $130.2 FICA Medicare tax $2,100 1.45% $30.45 FUTA taxes $2,100 3.1% $65.1 SUTA taxes $2,100 2.9% $60.9 Total payroll expense of employer $286.65 The FICA social security tax and Medicare tax will be applied at prescribed rate on the whole of salaries payable in the month as the threshold limit of $ 127,200 has not been reached for accumulated salaries included this month, which has been computed as $ 4,100. Apart from the above tax, the FUTA and SUTA will be applied at prescribed rate on the first $7,000 only. c. Employer Payroll tax expense: Apart from Gross salaries which are being offered to the employees, the employers are also required to contribute towards the taxes to the Federal and state. The FICA social security tax and Medicare tax need to be equally contributed by the employer up to the threshold limit. Apart from these taxes, the unemployment tax both for Federal and State need to be contributed by the employer till the salaries of each particular employee does not reach the threshold limit. To compute: The Payroll tax expenses of BMX in the third case. The Employer payroll tax expense is $ 481.95. The Computation of Payroll tax expenses has been made as under: Name of tax Pay Applicable (A) Tax rate (B) Tax amount [A × B] FICA Social security tax $6,300 6.20% $390.6 FICA Medicare tax $6,300 1.45% $91.35 FUTA taxes $7,000 3.1% $217 SUTA taxes $7,000 2.9% $203 Total payroll expense of employer $901.95 The FICA social security tax and Medicare tax will be applied at prescribed rate on $6,300 as the threshold limit of $ 127,200 has been reached for accumulated salaries included this month. Apart from the above tax, the FUTA and SUTA will be applied at prescribed rate on the first $7,000 only.

a. Employer Payroll tax expense: Apart from Gross salaries which are being offered to the employees, the employers are also required to contribute towards the taxes to the Federal and state. The FICA social security tax and Medicare tax need to be equally contributed by the employer upto the threshold limit. Apart from these taxes, the unemployment tax both for Federal and State need to be contributed by the employer till the salaries of each particular employee does not reach the threshold limit. To compute: The Payroll tax expenses of BMX in the first case. The Employer payroll tax expense is $ 109.2. The Computation of Payroll tax expenses has been made as under: Name of tax Pay Applicable (A) Tax rate (B) Tax amount [A × B] FICA Social security tax $800 6.20% $49.6 FICA Medicare tax $800 1.45% $11.6 FUTA taxes $800 3.1% $24.8 SUTA taxes $800 2.9% $23.2 Total payroll expense of employer $109.2 The FICA social security tax and Medicare tax will be applied at prescribed rate on the whole of salaries payable in the month as the threshold limit of $ 127,200 has not been reached for accumulated salaries included this month, which has been computed as $ 7,200. Apart from the above tax, the FUTA and SUTA will be applied at prescribed rate on the first $7,000 only. b. Employer Payroll tax expense: Apart from Gross salaries which are being offered to the employees, the employers are also required to contribute towards the taxes to the Federal and state. The FICA social security tax and Medicare tax need to be equally contributed by the employer up to the threshold limit. Apart from these taxes, the unemployment tax both for Federal and State need to be contributed by the employer till the salaries of each particular employee does not reach the threshold limit. To compute: The Payroll tax expenses of BMX in the second case. The Employer payroll tax expense is $ 286.65. The Computation of Payroll tax expenses has been made as under: Name of tax Pay Applicable (A) Tax rate (B) Tax amount [A × B] FICA Social security tax $2,100 6.20% $130.2 FICA Medicare tax $2,100 1.45% $30.45 FUTA taxes $2,100 3.1% $65.1 SUTA taxes $2,100 2.9% $60.9 Total payroll expense of employer $286.65 The FICA social security tax and Medicare tax will be applied at prescribed rate on the whole of salaries payable in the month as the threshold limit of $ 127,200 has not been reached for accumulated salaries included this month, which has been computed as $ 4,100. Apart from the above tax, the FUTA and SUTA will be applied at prescribed rate on the first $7,000 only. c. Employer Payroll tax expense: Apart from Gross salaries which are being offered to the employees, the employers are also required to contribute towards the taxes to the Federal and state. The FICA social security tax and Medicare tax need to be equally contributed by the employer up to the threshold limit. Apart from these taxes, the unemployment tax both for Federal and State need to be contributed by the employer till the salaries of each particular employee does not reach the threshold limit. To compute: The Payroll tax expenses of BMX in the third case. The Employer payroll tax expense is $ 481.95. The Computation of Payroll tax expenses has been made as under: Name of tax Pay Applicable (A) Tax rate (B) Tax amount [A × B] FICA Social security tax $6,300 6.20% $390.6 FICA Medicare tax $6,300 1.45% $91.35 FUTA taxes $7,000 3.1% $217 SUTA taxes $7,000 2.9% $203 Total payroll expense of employer $901.95 The FICA social security tax and Medicare tax will be applied at prescribed rate on $6,300 as the threshold limit of $ 127,200 has been reached for accumulated salaries included this month. Apart from the above tax, the FUTA and SUTA will be applied at prescribed rate on the first $7,000 only.

Solution Summary: The author calculates the Payroll tax expenses of BMX in the first case. The Employer payroll tax expense is 109.2. The FICA social security tax and Medicare tax are equally contributed by the employer up to the threshold

Connect Access Card for Financial Accounting: Information and Decisions

Connect Access Card for Financial Accounting: Information and Decisions

8th Edition

ISBN: 9781259662966

Author: John J Wild

Publisher: McGraw-Hill Education

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Connect Access Card for Financial Accounting: Information and Decisions

Ch. 9 - Prob. 1DQ Ch. 9 - Prob. 2DQ Ch. 9 - Prob. 3DQ Ch. 9 - Prob. 4DQ Ch. 9 - What is the combined amount (in percent) of the...Ch. 9 - What is the current Medicare tax rate? This rate...Ch. 9 - Prob. 7DQ Ch. 9 - Prob. 8DQ Ch. 9 - Prob. 9DQ Ch. 9 - Why are warranty liabilities usually recognized on...

Ch. 9 - Prob. 11DQ Ch. 9 - Prob. 12DQ Ch. 9 - Prob. 13DQ Ch. 9 - Prob. 14DQ Ch. 9 - Prob. 15DQ Ch. 9 - Prob. 16DQ Ch. 9 - Prob. 17DQ Ch. 9 - Prob. 1QS Ch. 9 - Prob. 2QS Ch. 9 - Ticketsales, Inc., receives $5,000,000 cash in...Ch. 9 - Prob. 4QS Ch. 9 - Prob. 5QS Ch. 9 - Prob. 6QS Ch. 9 - Prob. 7QS Ch. 9 - Prob. 8QS Ch. 9 - Prob. 9QS Ch. 9 - Prob. 10QS Ch. 9 - Prob. 11QS Ch. 9 - Prob. 12QS Ch. 9 - Sera Corporation has made and recorded its...Ch. 9 - Prob. 1E Ch. 9 - Prob. 2E Ch. 9 - Prob. 3E Ch. 9 - Interest-bearing notes payable with year-end...Ch. 9 - Prob. 5E Ch. 9 - Prob. 6E Ch. 9 - Prob. 7E Ch. 9 - Prob. 8E Ch. 9 - Prob. 9E Ch. 9 - Hitzu Co. sold a copier costing $4,800 with a...Ch. 9 - Prob. 11E Ch. 9 - Prob. 12E Ch. 9 - Accounting for contingent liabilities C3 Prepare...Ch. 9 - Prob. 14E Ch. 9 - Prob. 15E Ch. 9 - Prob. 16E Ch. 9 - Prob. 18E Ch. 9 - Prob. 1PSA Ch. 9 - Prob. 2PSA Ch. 9 - Prob. 3PSA Ch. 9 - Prob. 4PSA Ch. 9 - Prob. 5PSA Ch. 9 - Entries for payroll transactions P2 P3 P5...Ch. 9 - Prob. 1PSB Ch. 9 - Prob. 2PSB Ch. 9 - Fishing Guides Co. has four employees. FICA Social...Ch. 9 - Prob. 4PSB Ch. 9 - Shown here are condensed income statements for two...Ch. 9 - Prob. 6PSB Ch. 9 - Prob. 9SP Ch. 9 - Refer to the financial statements of Apple in...Ch. 9 - Key figures for Apple and Google follow. *Apple...Ch. 9 - Prob. 3BTN Ch. 9 - Prob. 5BTN Ch. 9 - Assume that your team is in business and you must...Ch. 9 - Prob. 7BTN Ch. 9 - Prob. 8BTN Ch. 9 - Prob. 9BTN

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