Jack, an employee of Desert Sky, Inc, has gross salary for May of $16,000
The entire amount is under the OASDI limit of $117,000 and thus subject to FICA. He is also subject to federal income tax at a rate of 24%. Which of the following is a part of the journal entry for accrual of the employer payroll taxes? (Assume a FICA-OASDI Tax of 6.2% and FICA-Medicare Tax of 1.45%.) Jack's income to date exceeds the FUTA and SUTA tax income limits.
A) credit to Salaries Payable for $16,000
B) debit to Cash for $11,256.00
C) debit to Employee Income Taxes payable of $3,840.00
D) credit to FICA-Medicare Taxes Payable of $232.00
D .OASDI ($16,000 x 6.2%) $992.00
Medicare ($16,000 x 1.45%) 232.00
Payroll Tax Expense $1,224
Credit to FICA—Medicare Taxes payable = $232.00
Payroll Tax Expense 1,224
FICA—Medicare Taxes Payable 232.00
FICA—OASDI Taxes Payable 992.00
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