Lee Company has the following information for the pay period of December 15-31: $$\begin{array} { l r l r }
\text { Gross payroll } & \$ 16,000 & \text { Federal income tax withheld } & \$ 4,000 \
\text { Social security rate } & 6 \% & \text { Federal unemployment tax rate } & 0.8 \% \
\text { Medicare rate } & 1.5 \% & \text { State unemployment tax rate } & 5.4 \%
\end{array}$$
Assuming no employees are subject to ceilings for taxes on their earnings, Salaries Payable would be recorded for
A) $16,000
B) $9,808
C) $10,800
D) $11,040

Question

Lee Company has the following information for the pay period of December 15-31:  $$\begin{array} { l r l r } 
\text { Gross payroll } & \$ 16,000 & \text { Federal income tax withheld } & \$ 4,000 \
\text { Social security rate } & 6 \% & \text { Federal unemployment tax rate } & 0.8 \% \
\text { Medicare rate } & 1.5 \% & \text { State unemployment tax rate } & 5.4 \%
\end{array}$$ 
Assuming no employees are subject to ceilings for taxes on their earnings, Salaries Payable would be recorded for
A) $16,000
B) $9,808
C) $10,800
D) $11,040

Quizplus · Accepted Answer

Salaries Payable is calculated by subtracting the Federal income tax withheld from the Gross payroll. Thus, $16,000 - $4,000 = $12,000. However, the question seems to have a discrepancy in the calculation or the options provided, as none of the options directly reflect this calculation. The closest option based on the provided data is C) $10,800, assuming additional deductions or a mistake in the question setup.

Lee Company Has the Following Information for the Pay Period