Asked by Genesis Hernandez on Jul 22, 2024
Verified
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 the accrued payroll taxes would include a
A) debit to SUTA Payable for $630
B) debit to SUTA Payable for $18,900
C) credit to SUTA Payable for $630
D) credit to SUTA Payable for $18,900
SUTA Payable
State Unemployment Tax Act payable, a liability account for taxes owed by employers to state unemployment insurance programs.
Social Security Tax
Taxes collected by the government from employees and employers to fund the Social Security program, providing retirement, disability, and survivors' benefits.
- Acquire knowledge of the constituents and consequences of employer payroll taxes on fiscal statements.
Verified Answer
AK
Aliabbas KhakuJul 25, 2024
Final Answer :
C
Explanation :
State Unemployment Tax Act (SUTA) payable is calculated as $15,000 * 4.2% = $630. Since it's a liability, it should be credited.
Learning Objectives
- Acquire knowledge of the constituents and consequences of employer payroll taxes on fiscal statements.