Carl Company has a monthly gross payroll of $6,000, which is subject to unemployment taxes (federal at 0.8% and state at 5.4%). All earnings are subject to 6.2% FICA taxes for Social Security, and 1.45% FICA Taxes for Medicare. Income tax (Federal and State combined) withholdings are 25% of total earnings. The entry to record the monthly Salaries Expense includes:
A) Credit to FICA - Medicare Taxes payable of $87
B) Credit to State Unemployment Taxes Payable of $324
C) Credit to Federal Unemployment Taxes Payable of $48
D) Debit to Payroll Taxes Expense of $831
E) Credit to Accrued Payroll Payable of $3,210
Answer: A) Credit to FICA - Medicare Taxes payable of $87
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Indicate whether the statement is true or false.