Question

The following totals for the month of April were taken from the payroll records of Sage Hill Company.

Salaries $98400
FICA taxes withheld 7530
Income taxes withheld 20500
Medical insurance deductions 3700
Federal unemployment taxes 260
State unemployment taxes 1770

The journal entry to record the monthly payroll on April 30 would include a:

a) debit to Salaries and Wages Expense for $98400.
b) debit to Salaries and Wages Expense for $66670.
c) credit to Salaries and Wages Payable for $98400.

Answer 1

Answer:

a) debit to Salaries and Wages Expense for $98400.

Explanation:

The Journal entry is shown below:-

Salaries and wages expenses Dr, $98,400

             To FICA tax payable $7,530

             To Federal Income tax payable $20,500

             To Medical Insurance payable $3,700

             To Salaries and wages payable $66,670

(Being monthly payroll on April 30 is recorded)

Therefore, we debited the salary and wages expenses as expenses is increasing while we credited FICA taxes payable, federal income tax payable, medical insurance payable and salaries and wages payable as its increasing the liabilities.

The state unemployment taxes is ignored as it is not relevant