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 Salaries Payable of $450,000
B) credit to Salaries Payable of $500,000
C) debit to Salaries Expense of $500,000
D) credit to Salaries Expense of $450,000

Question

Quizplus · Accepted Answer

The journal entry to record accrued salaries would include a debit to Salaries Expense for the total amount of salaries owed, which in this case is $500,000 (the sum of $450,000 subject to social security tax and $500,000 subject to Medicare tax). Therefore, the correct answer is C, debit to Salaries Expense of $500,000. The other answer choices are incorrect because they either only include one of the taxes or do not take into account the total amount of salaries owed.

According to a Summary of the Payroll of Scotland Company