Question

Merger Co. has 10 employees, each of whom earns \(2,000 per month and has been employed since

January 1. FICA Social Security taxes are 6.2% of the first \)118,500 paid to each employee, and FICA

Medicare taxes are 1.45% of gross pay. FUTA taxes are 0.6% and SUTA taxes are 5.4% of the first $7,000

paid to each employee. Prepare the March 31 journal entry to record the March payroll taxes expenses.

(Round amounts to cents.)

Short answer

The payroll expense of the company is $2,730.

Step-by-step solution

Step-by-Step SolutionStep 1: Definition of payroll expenses

Salaries expenses are those expenses, which are paid by a company to their employees for the professional services they provide the company

Journal entries for payroll expenses

Date	Particulars	Debit	Credit
March 31	Payroll Taxes Expense	$2,730
	FICA Social Security Taxes Payable		$1,240
	FICA Medicare Taxes Payable		$290
	FUTA Taxes		$120
	SUTA Taxes		$1,080
	(To record the payroll expense of the company)