Question

Grammy's Bakery had the following information for the bi-weekly pay period ending June 30: earnings

Employee Pay rate Hours Cumulative earnings Department Federal
Name worked prior to current payroll income tax
withheld
P Ganster $2.000 salaried 12000 itchen 86.00
T. Baker $10.00/hour 50 $6,500 Office $22.00
Assume:
FICA-OASDI applied to the first $117,000 at a rate of 6.2%.
FICA-Medicare applied at a rate of 1.45%
FUTA applied to the first $7,000 at a rate of 0.6%
SUTA applied to the first $7,000 at a rate of 5.4%
State income tax is 3.8%
Given the information above, what would be the amount applied to FUTA Payable?
a. Debit $3.00
b. Debit $20.40
c. Credit $3.00
d. Credit $20.40

Answer 1

c. Credit $3.00

Step-by-step explanation:

The computation of the amount applied to FUTA Payable is shown below:

The Current Earnings for T. Baker is

= 50 × 10

= $500

And,

The FUTA applied is

= 6% of $500

= $3

So here we credit the futa payable by $3

Therefore the option c is correct

And, the rest of the options are wrong