Author Question: Payless, Inc's gross payroll was 100,000 for the current pay period. Federal income tax (FIT) ... (Read 55 times)

madam-professor · **on:** Jul 5, 2018

Payless, Inc's gross payroll was 100,000 for the current pay period. Federal income tax (FIT) withheld totals 20,000. The FICA (Social Security) rate is 6.2 and the Medicare rate is 1.45.

Part A: Show the effect of paying its employees (do not record the employer's payroll taxes):

Shareholders' equity
Assets Liabilities CC Retained earnings

Part B: How much cash will Payless, Inc have to pay to the government for Federal income taxes, Social Security, and Medicare on the gross payroll of 100,000?

What will be an ideal response?

Question 2

The bank reconciliation is an important part of the system of internal controls.
a. True
b. False

Indicate whether the statement is true or false

qytan · **Reply #1 on:** Jul 5, 2018

Answer to Question 1

Part A: Shareholders' equity
Assets Liabilities CC Retained earnings

(72,350 ) Cash
20,000 FIT payable
6,200 FICA taxes payable
1,450 Medicare taxes payable (100,000 ) salary expense

Part B: 35,300 = 20,000 + 2 (6,200 + 1,450 )

Answer to Question 2

True