Kevin,an Employee of Sunbeam,Inc

question 10

Multiple Choice

Kevin,an employee of Sunbeam,Inc. ,has gross salary for May of $8,000.The entire amount is under the OASDI limit of $117,000 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 to record the disbursement of his net pay? (Assume a FICA-OASDI Tax of 6.2% and FICA-Medicare Tax of 1.45%. )

• A)debit to Cash for $5,788.00
• B)credit to Cash for $5,788.00
• C)debit to Employee Income Tax Payable of $5,788.00
• D)debit to FICA Tax Payable of $5,788.00

---

Definitions:

Monopolist's Demand Curve

A graphical representation showing how the quantity demanded by the market varies with price, uniquely for monopolies where the firm's demand curve is also the market demand curve.

Elastic

A description of a situation in which the supply or demand for a product is highly responsive to changes in price, indicating sensitivity in the quantity supplied or demanded.

Monopolistically Competitive

Refers to a market structure where many firms sell products that are similar but not identical, allowing for some degree of market power.

Purely Competitive

A market scenario where the selling price of products is determined by the overall supply and demand, with numerous sellers and homogeneous products.