1. Payroll accounting. Assume that the following tax rates and payroll information pertain to Brookhaven Publishing: ·         Social Security taxes: 4%…

1. 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 $7,000 earned 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

b. Prepare the journal entry to record Brookhaven’s payroll tax expense. The entry will include the following:

·         Matching Social Security taxes

·         Matching Medicare taxes

·         State unemployment taxes

·         Federal unemployment taxes