Art Panache, the Sole Employee of Panache Sales, Has Gross

question 91

Multiple Choice

Art Panache, the sole employee of Panache Sales, has gross salary for May of $6,000. The entire amount is under the OASDI limit of $110,100, and thus subject to FICA. He is also subject to federal income tax at a rate of 20%. Which of the following is a part of the journal entry for accrual of the employer payroll taxes? (Assume a FICA-OASDI Tax of 6.2% and FICA-Medicare Tax of 1.45%.) Art's income to date exceeds the FUTA and SUTA tax income limits.

• A)credit to Salary payable for $6,000
• B)debit to Cash for $4,461
• C)debit to Employee income tax payable of $1,200
• D)credit to FICA-Medicare tax payable of $87

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Definitions:

Long-Term Valuation

Assessing the worth or potential future value of assets, investments, or companies over an extended period.

Profitability

The ability of a company to generate earnings compared to its expenses and other relevant costs incurred during a specific period of time.

Transactional Leaders

Leaders who focus on the role of supervision, organization, and group performance; they are concerned with status quo and day-to-day progress toward goals, often employing a reward-punishment system.

Employee Satisfaction

The level of contentment employees feel regarding their job and workplace conditions, which can impact productivity and loyalty.