Answer all please [p 407-413] Employers often withhold payroll items, such as in

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Answer all please

[p 407-413] Employers often withhold payroll items, such as income tax and health benefit premiums, from employee paychecks and remit them on behalf of the employee. For instance, Sarah's company withholds from her paycheck the monthly premium for her medical plan, then sends that amount to Blue Cross on Sarah's behalf. Sarah's employer also withholds income tax from Sarah's paycheck and remits that amount to the Internal Revenue Service (IRS). Until the employer remits the amounts withheld to the insurance company or the IRS, the employer should record these withholdings as: O Payroll receipts O Current liabilities O Current assets O Wages payable

Explanation / Answer

ans 1 b) Current Liabilities As the withholding taxes are payable within a year (I,e in the next month or quarter as the case may be) hence it is a current liability ans 2 c) Periodic interest expense on the $10000 Notes payable As this is a fixed cost which will be incurredon the note borrowed from bank ans 3 d) A contingent liability is the same as known liability As contingent liabilities can be probable, remote or reasonably possible. Hence it cannot be a known liabilty

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