This company has a weekly payroll of $10,000 for its employees who work Monday through Friday. Federal and state income taxes are withheld in the amounts of $1,700 and $400, respectively, and FICA taxes are withheld at a mandatory rate of 7.65% (6.2% for Social Security and 1.45% for Medicare). In addition, the federal and state unemployment taxes are applied at rates of 2% and 5%, respectively. The company's year-end is December 31. Which of the following statements is true regarding the FICA taxes that must be recorded? a. Social Security tax expense will be debited in the amount of $1,240. b. Medicare taxes payable will be credited in the amount of $1,530 c. Medicare tax expense will be debited in the amount of $290. d. Social Security tax expense will be debited in the amount of $620.

This company has a weekly payroll of $10,000 for its employees who work Monday through Friday. Federal and state income taxes are withheld in the amounts of $1,700 and $400, respectively, and FICA taxes are withheld at a mandatory rate of 7.65% (6.2% for Social Security and 1.45% for Medicare). In addition, the federal and state unemployment taxes are applied at rates of 2% and 5%, respectively. The company's year-end is December 31. Which of the following statements is true regarding the FICA taxes that must be recorded? a. Social Security tax expense will be debited in the amount of $1,240. b. Medicare taxes payable will be credited in the amount of $1,530 c. Medicare tax expense will be debited in the amount of $290. d. Social Security tax expense will be debited in the amount of $620.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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