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

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Definitions:

Social Exchange Theory

A theoretical framework that suggests social behavior is a result of an exchange process to maximize benefits and minimize costs.

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Relationship

A connection, association, or involvement between two or more individuals.

Similarity Principle

The tendency for individuals to be attracted to or affiliate with others who are similar to themselves in various aspects.