FICA is the for Social Security of 12.4% and Medicare of 2.95% which will be paid half by the employer and half by the employee. However, independent contractors will pay only 6.2% for Social Security and 1.45% for Medicare to the Federal Government.a) Trueb) FICA is mandatory c) Falsed) Independent Contractors do not pay FICA During January 2021, ABC Inc. incurs employee salariesof $3,000,000. Federal income tax withholding was$450,000, State income tax was $187,500, and $30,000for the employee portion of health insurance (payable toBlue Cross). The employer portion for Health Care was$90,000.1. Record the employee salary expense, withholdingsincluding FICA (Emplyees' responsibility: SocialSecurity 6.2% and Medicare 1.45% of the grosspay), and salaries payable for January 20212. Record the employer-provided fringe benefits.3. Record the employer payroll taxes (Emplyers'responsibility: Social Security 6.2% and Medicare1.45% of the gross pay) (assuming no employeepassed the $7000 income limit on this first monthof January for FUTA 0.6% and SUTA 5.4%combined 6% of the first $7000 annual income)When ready, after preparing Journal Entries on paper,answer the following questions.

Answered: FICA is the for Social Security of…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 15EA: In EA14, you prepared the journal entries for the employee of Toren Inc. You have now been given the...

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Question

FICA is the for Social Security of 12.4% and Medicare of 2.95% which will be paid half by the employer and half by the employee. However, independent contractors will pay only 6.2% for Social Security and 1.45% for Medicare to the Federal Government.

a) True

b) FICA is mandatory

c) False

d) Independent Contractors do not pay FICA

During January 2021, ABC Inc. incurs employee salaries
of $3,000,000. Federal income tax withholding was
$450,000, State income tax was $187,500, and $30,000
for the employee portion of health insurance (payable to
Blue Cross). The employer portion for Health Care was
$90,000.
1. Record the employee salary expense, withholdings
including FICA (Emplyees' responsibility: Social
Security 6.2% and Medicare 1.45% of the gross
pay), and salaries payable for January 2021
2. Record the employer-provided fringe benefits.
3. Record the employer payroll taxes (Emplyers'
responsibility: Social Security 6.2% and Medicare
1.45% of the gross pay) (assuming no employee
passed the $7000 income limit on this first month
of January for FUTA 0.6% and SUTA 5.4%
combined 6% of the first $7000 annual income)
When ready, after preparing Journal Entries on paper,
answer the following questions.

Expert Solution

Step 1

You have asked multiple questions we can answer only first question please repost the question with specify the no of questions.

FICA stands for the Federal Contribution Act which is used in U.s for social security and Medicare programs. It's paid by employer and employees both.