Gene's Gross Pay for the Week Is $1,300

question 147

Multiple Choice

Gene's gross pay for the week is $1,300.His yearly pay is under the limit for OASDI.Assume that the rate for state and federal unemployment compensation taxes is 6% and that Gene's year-to-date pay has previously exceeded the $7,000 cap.His yearly pay is under the limit for OASDI.What is the total amount of payroll taxes that Gene's employer must record as payroll tax expenses? (Do not round your intermediate calculations.Assume a FICA-OASDI Tax of 6.2% and FICA-Medicare Tax of 1.45%. )

• A)$80.60
• B)$54.60
• C)$18.85
• D)$99.45

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Definitions:

Direct Method

In cost accounting, a method to allocate service department costs directly to producing departments without considering services rendered between service departments.

Net Cash

The amount of cash available after all cash inflows and outflows have been accounted for.

Operating Activities

Transactions and events related to the primary business operations, including the production, sales, and delivery of a company's products and services.

Financing Activities

Transactions that involve raising capital or repaying investors, such as issuing equity or taking on new loans.