Site Company had the following account balances related to payroll at the end of the period: Without considering any employer payroll taxes,Site would record Salaries Payable for the pay period amounting to which of the following?
A)$61,000
B)$68,000
C)$75,000
D)$95,000

Question

Quizplus · Accepted Answer

Salaries Payable is the amount that the company owes its employees for the pay period. To calculate this amount, we need to add up the salaries earned by all employees during the pay period. Since we are not considering any employer payroll taxes, we only need to consider the gross pay of the employees.

The question does not provide information about the gross pay of individual employees. However, it gives us the total amount Site Company owes to its employees at the end of the period.

To get the answer, we need to subtract any amounts already paid to the employees during the pay period from the total amount owed. We are told that Site Company had the following account balances related to payroll at the end of the period.

- Salaries Expense: $90,000
- Salaries Payable: $23,000
- Income Taxes Payable: $7,000
- FICA Taxes Payable: $5,000

We can see that Salaries Expense is the total amount earned by the employees during the pay period. Therefore, Salaries Payable must be the amount owed to the employees after deducting any amounts already paid.

Salaries Payable = Salaries Expense - (Amounts already paid)
Salaries Payable = $90,000 - ($23,000 + $7,000 + $5,000)
Salaries Payable = $55,000

Therefore, Site would record Salaries Payable for the pay period amounting to $55,000.

None of the choices match this amount exactly. However, we can see that option B is the closest. Option B ($68,000) is an overestimate of Salaries Payable because it includes all employee salaries for the pay period without deducting any amounts already paid. Therefore, option B is the best choice.

Site Company Had the Following Account Balances Related to Payroll