Jefferson Tutoring Had the Following Payroll Information on February 28

question 23

Multiple Choice

Jefferson Tutoring had the following payroll information on February 28: Assume: FICA tax rates are: OASDI 6.2% on a limit of $128,400 and Medicare 1.45%.
State Unemployment tax rate is 2% on the first $7,000.
Federal Unemployment tax rate is 0.8% on the first $7,000.
Using the information above, the journal entry to record the payroll tax expense for Jefferson Tutoring would include:

• A) a debit to Payroll Tax Expense in the amount of $429.55.
• B) a credit to FUTA Payable for $20.00.
• C) a credit to SUTA Payable for $50.00.
• D) All of the above are correct.

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Definitions:

Cost Of Capital

The necessary yield a business needs to achieve on investment endeavors to preserve its market capitalization and secure capital.

Discount Rate

The interest rate used to determine the present value of future cash flows or to evaluate the attractiveness of an investment.

Opportunity Cost

The cost of an alternative that must be forgone in order to pursue a certain action, essentially the benefits you could have received by taking another course of action.

EVA

Economic Value Added, a measure of a company's financial performance based on the residual wealth calculated by deducting its cost of capital from its operating profit.