According to a summary of the payroll of Scotland Company,$450,000 was subject to the 6.0% social security tax and $500,000 was subject to the 1.5% Medicare tax.Federal income tax withheld was $98,000.Also,$15,000 was subject to state 4.2% and federal 0.8% unemployment taxes.The journal entry to record accrued salaries would include a
A)debit to Salary Payable of $450,000
B)credit to Salary Payable of $500,000
C)debit to Salary Expense of $500,000
D)credit to Salary Expense of $450,000

Question

Quizplus · Accepted Answer

The journal entry to record accrued salaries would include a debit to Salary Expense for the total amount of salaries earned by employees, which in this case is $500,000. The social security and Medicare taxes are liabilities of the company, not expenses, so they would be recorded separately. The federal income tax withheld is also not an expense, but rather a reduction of the amount paid to employees. The state and federal unemployment taxes are also a liability of the company, but they are not related to accrued salaries.

According to a Summary of the Payroll of Scotland Company,$450,000