A Company Has 24 Employees Who Are Paid on a Monthly

Multiple Choice

A company has 24 employees who are paid on a monthly basis. For the most recent month, gross earnings were $78,000, of which $27,000 is subject to employment taxes. The federal unemployment tax rate is .8% and the state unemployment rate is 5.4%. Federal income taxes are withheld at the rate of 20% of total earnings. All earnings are subject to FICA taxes of 8%.
Which of the following is included in the entry to record payroll taxes?

A) A credit to Employee income tax payable for $6,240
B) A credit to FICA tax payable for $6,240
C) A debit to Payroll tax payable for $7,914
D) A debit to Unemployment tax expense for $6,240