Lee Company has the following information for the pay period of December 15-31:?? $$\begin{array} { l r l r }
\text { Gross payroll } & \$ 16,000 & \text { Federal income tax withheld } & \$ 4,000 \
\text { Social security rate } & 6.0 \% & \text { Federal unemployment tax rate } & 0.8 \% \
\text { Medicare rate } & 1.5 \% & \text { State unemployment tax rate } & 5.4 \%
\end{array}$$ Assuming no employees are subject to ceilings for taxes on their earnings, Salaries Payable would be recorded for

Question

Lee Company has the following information for the pay period of December 15-31:?? $$\begin{array} { l r l r } 
\text { Gross payroll } & \$ 16,000 & \text { Federal income tax withheld } & \$ 4,000 \
\text { Social security rate } & 6.0 \% & \text { Federal unemployment tax rate } & 0.8 \% \
\text { Medicare rate } & 1.5 \% & \text { State unemployment tax rate } & 5.4 \%
\end{array}$$ Assuming no employees are subject to ceilings for taxes on their earnings, Salaries Payable would be recorded for

Quizplus · Accepted Answer

Salaries Payable is the net amount to be paid to employees after deductions. To calculate it, subtract the Federal income tax, Social Security tax, and Medicare tax from the Gross payroll. Federal and State unemployment taxes are employer expenses and do not reduce Salaries Payable. Calculation: $16,000 - $4,000 (Federal income tax) - $960 (Social Security tax, 6% of $16,000) - $240 (Medicare tax, 1.5% of $16,000) = $10,800.

Lee Company Has the Following Information for the Pay Period