compliance checks . Richard and Linda are the only two employces of Carolina Com
ID: 2602885 • Letter: C
Question
compliance checks . Richard and Linda are the only two employces of Carolina Company. In January, 2013, Richard's gross pay was $5,500 and Linda's gross pay was $5,200. Each employee pays federal income tax equal to 25% of gross pay. In addition, Linda pays $200 for insurance premiums and Richard pays $225. Each has $25 withheld for life insurance premiums. Assume a FICA tax rate of 8% on all earnings, a federal unemployment tax rate of 0.8%, and a state nemployment tax rate of 5.4%. The unemployment taxes are based on the first $7,000 of employee annual earnings The entry to record the payroll 'r Janary would includc a debt to salary payable to employees for $6,694. credit to federal unemployment tax payable for $86. credit to FICA tax payable for $856. credit to state unemployment tax payable for $578.Explanation / Answer
Solution - (C)
Credit to FICA Tax payable for $856
Calculation
Particulars Amount Richard FICA Tax ($5500*8%) $440 Linda FICA Tax ($5200*8%) $416 Total Credit to FICA Tax Payable $856Related Questions
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