Great Lakes Tutoring had the following payroll information on February 28: Assume:
FICA tax rates are: OASDI 6.2% on a limit of $106,800 and Medicare 1.45%
State Unemployment tax rate is 2% on the first $7,000
Federal Unemployment tax rate is 0.8% on the first $7,000
Using the information above, the journal entry to record the employee's tax expense would include:
A)a debit to Payroll Tax Expense in the amount of $4,000.
B)a debit to Wages and Salaries Expense in the amount of $4,000.
C)a credit to Cash in the amount of $4,000.
D)a credit to FUTA Payable for $24.

Question

Great Lakes Tutoring had the following payroll information on February 28:  Assume:
FICA tax rates are: OASDI 6.2% on a limit of $106,800 and Medicare 1.45%
State Unemployment tax rate is 2% on the first $7,000
Federal Unemployment tax rate is 0.8% on the first $7,000
Using the information above, the journal entry to record the employee's tax expense would include:
A)a debit to Payroll Tax Expense in the amount of $4,000. 
B)a debit to Wages and Salaries Expense in the amount of $4,000. 
C)a credit to Cash in the amount of $4,000. 
D)a credit to FUTA Payable for $24.

Quizplus · Accepted Answer

The Answer of Great Lakes Tutoring had the following payroll information on February 28:  Assume:
FICA tax rates are: OASDI 6.2% on a limit of $106,800 and Medicare 1.45%
State Unemployment tax rate is 2% on the first $7,000
Federal Unemployment tax rate is 0.8% on the first $7,000
Using the information above, the journal entry to record the employee's tax expense would include:
A)a debit to Payroll Tax Expense in the amount of $4,000. 
B)a debit to Wages and Salaries Expense in the amount of $4,000. 
C)a credit to Cash in the amount of $4,000. 
D)a credit to FUTA Payable for $24.

Great Lakes Tutoring Had the Following Payroll Information on February