Katie Pereira and Ferro Schwartz are the only two employees of Free Star Company.In February 2016,Katie's gross pay was $6500 and Ferro's gross pay was $12,400.All earnings are subject to Payroll tax of 4.2% and Medicare tax of 1.45%.Which of the following would be included in the entry to record the Payroll tax expense for February?

Question

Quizplus · Accepted Answer

The entry to record the Payroll tax expense for February would include a credit to Payroll tax payable for the amount to be remitted to the government. In this case, the total Payroll tax expense for both employees would be $793.80 ($6500 + $12400) x (4.2% + 1.45%) = $793.80. Therefore, choice A is the correct answer. Choices B and C are incorrect, as they do not reflect the correct account or amount for the entry. Choice D is incorrect, as it refers specifically to Medicare tax, which is only a portion of the total Payroll tax expense.

Katie Pereira and Ferro Schwartz Are the Only Two Employees