Brentwood Company has monthly salaries of $16,000. Assume Brentwood pays all the standard payroll taxes, no employees have reached the payroll tax limits, total income tax withheld is $2,000, and the only payroll deductions are payroll taxes. Journalize the accrual of salaries expense, accrual of employer payroll taxes, and payment of employee and employer payroll taxes for Brentwood Company. (Assume all of the monthly salary is subject to FUTA and SUTA. Record debits first, then credits. Select the explanation on the last line of the journal entry table.)
1 (Click the icon to view payroll tax rate information.)
Begin with the entry to accrue salaries expense and payroll withholdings for the employee.
Date
Accounts and Explanation
Salaries Expense
Employee Income Taxes Payable
FICA-OASDI Taxes Payable
FICA-Medicare Taxes Payable
Salaries Payable
To record salaries expense and payroll withholdings.
Next, record the entry to accrue employer payroll taxes for Brentwood Company.
Date
Accounts and Explanation
FICA-OASDI Taxes Payable
FICA-Medicare Taxes Payable
Debit
16,000
Credit
2,000
992
232
12,776
Debit
Credit
1 More Info
For all payroll calculations, use the following tax rates and round amounts to the nearest cent:
Employee: OASDI: 6.2% on first $118,500 earned; Medicare: 1.45% up to $200,000, 2.35% on earnings above $200,000.
Employer: OASDI: 6.2% on first $118,500 earned; Medicare: 1.45% on all earnings; FUTA: 0.6% on first $7,000 earned; SUTA: 5.4% on first $7,000 earned.
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