Katie Pereira and Ferro Schwartz are the only two employees of Free Star Company. In February, 2013, Katie's gross pay was $5,500 and Ferro's gross pay was $5,900. All earnings are subject to FICA-OASDI Tax of 4.2% and FICA-Medicare Tax of 1.45%. Which of the following would be included in the entry to record the salary expense for February?

Question

Quizplus · Accepted Answer

The FICA-OASDI Tax payable is calculated as 4.2% of the total gross pay of both employees, which is $11,400 ($5,500 + $5,900). Therefore, the credit to FICA-OASDI Tax payable is $478.80 (4.2% of $11,400).

Katie Pereira and Ferro Schwartz Are the Only Two Employees