Assume the following payroll information for Jane Smith: Gross Pay $10,000 Income tax $2,500 FICA Social...
Assume the following payroll information for Jane Smith:
|
Gross Pay |
$10,000 |
|
Income tax |
$2,500 |
|
FICA Social Security |
$620 |
|
FICA Medicare |
$145 |
What is included in the journal entry to record the employer amounts of the payroll? Assume gross salary maximums have not been reached.
FICA Medicare taxes payable $620
FICA Medicare taxes payable of $290
Employer portion of income tax $2,500
None of the above
Homework Answers
Answer: None of the above
.
- The employer has to pay the FICA - Social Security tax and FICA - Medicare tax just like an employee does.
- Employer's portion of FICA - Social Security tax = Employee's portion of FICA - Social Security tax = = $620
- Employer's portion of FICA - Medicare tax = Employee's portion of FICA - Medicare tax = $290
.
Why option 1 is incorrect?
The amount should be $145.
.
Why option 2 is incorrect?
The amount should be $145.
.
Why option 3 is incorrect?
The employer does not pay any income tax on payroll.
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