If a company's gross wages are $12,000,and it withholds $1,800 for income taxes and $800 for FICA taxes and other deductions,the journal entry to record the employees' pay should include a:
A)debit to Wages Expense for $9,400.
B)debit to Wages Payable for $9,400.
C)credit to Wages Payable for $12,000.
D)credit to Wages Payable for $9,400.

Question

Quizplus · Accepted Answer

The company's gross wages of $12,000 are reduced by the income taxes withheld of $1,800 and FICA taxes and other deductions of $800 for a total of $2,600. Therefore, the amount owed to the employees is $12,000 - $2,600 = $9,400. This amount should be recorded as a credit to Wages Payable. So, the journal entry should include a credit to Wages Payable for $9,400. The corresponding debit should be to Wages Expense. So, option D is the correct choice.

If a Company's Gross Wages Are $12,000,and It Withholds $1,800