Richard and Linda are the only two employees of Carolina Company. In January, 2013, Richard's gross pay was $5,500 and Linda's gross pay was $5,200. Each employee pays federal income tax equal to 25% of gross pay. In addition, Linda pays $200 for insurance premiums and Richard pays $225. Each has $25 withheld for life insurance premiums. Assume a FICA tax rate of 8% on all earnings, a federal unemployment tax rate of 0.8%, and a state unemployment tax rate of 5.4%. The unemployment taxes are based on the first $7,000 of employee annual earnings. The entry to record the payroll for Januarywould include a O debit to salary payable to employees for $6,694. O credit to federal unemployment tax payable for $86. O credit to FICA tax payable for $856. O credit to state unemployment tax payable for $578.

Richard and Linda are the only two employees of Carolina Company. In January, 2013, Richard's gross pay was $5,500 and Linda's gross pay was $5,200. Each employee pays federal income tax equal to 25% of gross pay. In addition, Linda pays $200 for insurance premiums and Richard pays $225. Each has $25 withheld for life insurance premiums. Assume a FICA tax rate of 8% on all earnings, a federal unemployment tax rate of 0.8%, and a state unemployment tax rate of 5.4%. The unemployment taxes are based on the first $7,000 of employee annual earnings. The entry to record the payroll for Januarywould include a O debit to salary payable to employees for $6,694. O credit to federal unemployment tax payable for $86. O credit to FICA tax payable for $856. O credit to state unemployment tax payable for $578.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter7: Losses—deductions And Limitations

Section: Chapter Questions

Problem 91TPC

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