Brookhaven Publishing_ Payroll accounting

Payroll accounting. Assume that the following tax rates and payroll information pertain to Brookhaven Publishing:

· Social Security taxes: 4% on the first $55,000 earned per employee

· Medicare taxes: 1.5% on the first $130,000 earned per employee

· Federal income taxes withheld from wages: $7,500

· State income taxes: 4% of gross earnings

· Insurance withholdings: 1% of gross earnings

·

· State unemployment taxes: 5.4% on the first $7,000 earned per employee

· Federal unemployment taxes: 0.8% on the first $7,000earned per employee

The company incurred a salary expense of $50,000 during February. All employees had earned less than $5,000 by month-end and no wages have been paid during the month.

a. Prepare the necessary entry to record Brookhaven’s February payroll. The entry will include deductions for the following:

· Social Security taxes

· Medicare taxes

· Federal income taxes withheld

· State income taxes

· Insurance withholdings