A Company Has Three Employees

question 212

Essay

A company has three employees. Total salaries for the month of January were $8,000. The federal income tax rate for all employees is 15%. The FICA-social security tax rate is 6.2% of the first $118,500 of earnings each calendar year and the FICA-Medicare tax rate is 1.45% of all earnings. Calculate the amount of employee taxes withheld and prepare the company's journal entry to record the January payroll assuming these were the only deductions.

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Definitions:

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