Question

Angie Pereira and Ferro Schwartz are employees of Free Star, Inc. In February 2019. Angie's gross pay was $6000, and Ferro's gross pay was $7400. All earnings are subject to FICA-OASDI Tax of 6.296 and FICA--Medicare Tax of 1.4596. Which of the following would be included in the entry to record the salaries expense for February?

A. a credit to Salaries Expense for 5830.80
B. a credit to FICA-OASDI Taxes Payable for $830.80
C. a debit to FICA-Medicare Taxes Payable for $830.80
D. a debit to Salaries Payable to employees for $830.80

Answer 1

B. a credit to FICA-OASDI Taxes Payable for $830.80

Step-by-step explanation:

Free Star, Inc. In February 2019.

Angie's gross pay was $6000,

Ferro's gross pay was $7400

Total gross pay $ 13400

FICA-OASDI Tax 6.296 %

$ 13400 * 6.2% = $ 830.80

The recording of the journal entry would require a debit to FICA tax and credit to FICA tax payable .

The FICa tax is 6.2 % which equals to $ 830.80 of the two gross pays.

All the other three options are incorrect.