Question

Use this information for Harris Company to answer the following question.

Assuming no employees are subject to ceilings for their earnings, Harris Company has the following information for the pay period of January 15–31.

Gross payroll	$10,000		Federal income tax withheld	$1,800
Social security rate	6.0%		Federal unemployment tax rate	0.8%
Medicare rate	1.5%		State unemployment tax rate	5.4%

Salaries Payable would be recorded for

a.$6,830

b.$8,200

c.$7,450

d.$8,630

Taylor Bank lends Guarantee Company $97,398 on January 1. Guarantee Company signs a $97,398, 9%, nine-month note. The entry made by Guarantee Company on January 1 to record the proceeds and issuance of the note is

a.

Cash		97,398
	Notes Payable	97,398

b.

Interest Expense		6,574
Cash		90,824
	Notes Payable	97,398

c.

Cash		103,972
	Interest Expense	6,574
	Notes Payable	97,398

d.

Cash		107,259
	Interest Expense	6,574
	Notes Payable	97,398
	Interest Payable	3,287

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 $18,900

b.credit to SUTA Payable for $18,900

c.credit to SUTA Payable for $630

d.debit to SUTA Payable for $630

Answer 1