Art Parrish,the sole employee of Parrish Sales,has gross salary for March of $4,000.The entire amount is under the OASDI limit of $106,800,and thus subject to FICA.He is also subject to federal income tax at a rate of 18%.His year-to-date pay has already exceeded the $7,000 cap for FUTA and SUTA.The fifth journal entry in the payroll cycle to record the payment by the company of payroll taxes to the government includes which of the following?
A) Credit to Salary payable
B) Credit to Employee income tax payable
C) Debit to FICA tax payable
D) Debit to Salary payable

Question

Quizplus · Accepted Answer

The journal entry to record the payment of payroll taxes to the government would include a debit to FICA tax payable, as this is the tax that Art Parrish is subject to based on his gross salary being under the OASDI limit. The other options listed (credit to salary payable, credit to employee income tax payable, debit to salary payable) do not accurately reflect the taxes being paid in this scenario.

Art Parrish,the Sole Employee of Parrish Sales,has Gross Salary for March