Molly 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 withholdings (Federal and State combined) are 25% of total earnings. The entry to record the monthly payroll tax expense will include:
A) credit to Accrued Salaries Payable of $4,041
B) credit to FICA- Social Security Taxes Payable of $372
C) credit to Income Taxes Payable of $1,500
D) credit to Accrued Salaries Payable of $4,041
E) credit to Payroll Taxes Expense of $831
Answer: B) credit to FICA- Social Security Taxes Payable of $372
Business
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