1. Richard and Linda are the only two er gross pay was $5,500 and Linda\'s gross

Question

1. Richard and Linda are the only two er 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 unemployment 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 taxes imposed on the employer would include a debit to FICA tax payable for $856. debit to employee income tax payable for $2,675. credit to state unemployment tax payable for $578. debit to federal unemployment tax payable for $86.

Explanation / Answer

Solution: credit to state unemployment tax payable for $578

Explanation: (5500 + 5200) * 5.4% = 578

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