In December 2010,Bob Cratchit worked for Scrooge & Marley and earned $1,000.Federal income tax withholding is 10%.The FICA rate is 6.2% and the Medicare tax is 1.45%.How much of Bob's December salary will be included in Salary expense on Scrooge & Marley's income statement for the year ended December 31,2010?
A)$1,000
B)$823.50
C)$900
D)$923.50

Question

Quizplus · Accepted Answer

Salary expense on an income statement includes the gross pay before any deductions. Bob earned $1,000, so the full amount is included in the Salary expense. Deductions for taxes do not affect the salary expense reported by the employer.

In December 2010,Bob Cratchit Worked for Scrooge & Marley and Earned