# ex 199 ada marion earns a salary of 7 500 per month during the year fica taxes are 7 4325059

##### Ex. 199

Ada Marion earns a salary of \$7,500 per month during the year. FICA taxes are 7.65% on the first \$117,000 of gross earnings. Federal unemployment insurance taxes are 6.2% of the first \$7,000; however, a credit is allowed equal to the state unemployment insurance taxes of 5.4% on the \$7,000. During the year, \$25,600 was withheld for federal income taxes and \$5,700 was withheld for state income taxes.

Ex. 199(Cont.)

Instructions

(a)Prepare a journal entry summarizing the payment of Ada’s total salary during the year.

(b)Prepare a journal entry summarizing the employer payroll tax expense on Ada’s salary for the year.

(c)Determine the cost of employing Grace for the year.

##### Ex. 200

Massimini Company had the following payroll data for the year:

Gross earnings of employees\$740,000

Employee earnings not subject to Social Security tax140,000

Employee earnings not subject to FUTA or SUTA tax490,000

Assuming the following:

FICA tax rate on first \$117,0007.65% (1.45% over \$117,000)

State Unemployment tax rate5.4%(SUTA)

Federal Unemployment tax rate.8%(FUTA)

Instructions

Compute Massimini's payroll tax expense for the year. Make a summary journal entry to record the payroll tax expense.

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