Auto Company\'s sales employees earned salaries of $20,000 during February 1-7,

ID: 2442366 • Letter: A

Question

Auto Company's sales employees earned salaries of $20,000 during February 1-7, all of which are subject to %7.65 OASDI and HI tax withholdings. In addition, Auto Company has agreed with its employees to withhold the following amounts: $800 for hospital insurance, $3,200 for federal income taxes, and $240 for union dues. Which of the following entries should be journalized to accrue the payroll?Question 2 options:
a. (dr)Sales Salaries Expense $20,000
(cr)Accrued Payroll Payable $20,000

b. (dr)Sales Salaries Expense $20,000
(dr)Payroll Taxes Expense $1,530
(cr)OASDI and HI Taxes Payable $3,060
(cr)Federal Income Taxes Payable $3,200
(cr)Hospital Insurance Payable $800
(cr)Union Dues Payable $240
(cr)Accrued Payroll Payable $14,230

c. (dr)Sales Salaries Expense $20,000
(cr)OASDI and HI Taxes Payable $1,530
(cr)Federal Income Taxes Payable $3,200
(cr)Hospital Insurance Payable $800
(cr)Union Dues Payable $240
(cr)Cash $14,230

d. (dr)Sales Salaries Expense $20,000
(cr)OASDI and HI Taxes Payable $1,530
(cr)Federal Income Taxes Payable $3,200
(cr)Hospital Insurance Payable $800
(cr)Union Dues Payable $240
(cr)Accrued Payroll Payable $14,230
show work please

Explanation / Answer

Debit to payroll expenses

Credit to accured payroll

Hospital Insurance $800

Federal Incometaxes $3,200

Union dues $240

Employee salaries $20,000

Date

Particulars

Dr.

Cr.

Salees Salaries Expenses

$20,000

OASDI and HI taxes Payalbe [$20,000 *7.65%]

$1,530

Federal Income Taxes Payable

$3,200

Hospital Insurance Payable

$800

Union Due Payable

$240

Accrued Payroll Payable

$14,230