Chapter Seven, Exercises 2 and 4

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.

Prepare the necessary entry to record Brookhaven's February payroll that will be paid on March 1.

Prepare the journal entry to record Brookhaven's payroll tax expense.

Copy of ACC205 Week Four Gu File Home Insert Page Layout Formulas Data Review view Tell me what you want to do i RENEW YOUR SUBSCRIPTION To keep using your Office applications without interruption, please renew by Wednesda C27 22 23 Account to Original be changed Amount Ch 7 Ex 4 25 ASHFORD VIDEO Salary expense 51000 26 YOUR ANSWERS BASED UPON Questions 28 COURSE START DATE 29 30 Salary expense Social Security Payable 31 Medicare Payable 32 33 Fed Taxes Payable State Taxes Payable 34 Insurance Payable 35 Cash 36 37 38 Payroll Tax Expense Social Security Payable 39 Medicare Payable 40 41 State unemployment Fed unemployment 42 43 45 Original Account to 46 be changed Amount 47 Student Guidance Report Ready