Dan Jones and Pat Smith are two employees of Lone Star, Inc. In January 2017, Da

Question

Dan Jones and Pat Smith are two employees of Lone Star, Inc. In January 2017, Dan's gross pay was $11,500, and Pat's gross pay was $15,400. All earnings are subject to FICA-OASDI Tax of 6.2% and FICA-Medicare Tax of 1.45%. Which of the following would be included in the entry to record the payroll tax expense to be paid out by Lone Star, Inc. for January? 17) A) a debit to FICA-OASDI Taxes Payable for $390.05 B) a debit to Salaries Payable to employees for $390.05 C) a credit to FICA-Medicare Taxes Payable for $390.05 D) a credit to Salaries Expense for $390.05

Explanation / Answer

Working Notes :-

Journal Entry to record Payroll Expense is as follows:-

In the Books of Lone Star, Inc

So, as explained above, Option C is the correct answer.

Employee name Amount Dan 11500 Paat 15400 Total Salary 26900 FICA-Medicare Tax@1.45% 390.05 FICA-OASDI tax@ 6.2% 1667.8

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