Answer the following statements true (T) or false (F)

Question

1. David, an employee of Cecil, Inc., has gross salary for March of $5,900. The entire amount is under
the OASDI limit of $118,500, and thus subject to FICA. He is also subject to federal income tax at a rate
of 30%. His year-to-date pay has already exceeded the $7,000 cap for FUTA and SUTA. The journal
entry to record the employer's payroll tax expense includes a credit to FICA-OASDI Taxes Payable for $365.80. (Assume a FICA-OASDI Tax of 6.2% and FICA-Medicare Tax of 1.45%.)
2. Joel, an employee of Cruise Travel, Inc., has gross salary for March of $5,200. The entire amount is
under the OASDI limit of $118,500, and thus subject to FICA. He is also subject to federal income tax at a
rate of 29%. His year-to-date pay has already exceeded the $7,000 cap for FUTA and SUTA. The journal entry to record employer's payroll tax expense includes a credit to FICA-Medicare Taxes Payable for $150.80. (Assume a FICA-OASDI Tax of 6.2% and FICA-Medicare Tax of 1.45%.)
3. The journal entry to record the employer's payroll tax expense will include a debit to Employee
Income Taxes Payable.
4. Maywood Company withholds $720 from Steve's paycheck for federal income tax. This amount is part
of the company's payroll tax expense.

Answer 1

1. True
2. False - FICA-Medicare Tax Payable = $5,200 × 1.45% = $75.40
3. False
4. False