William Corp. pays its employees every two weeks. Employee wages earned over a two-week period is $250,000. All wages are subject to social security and Medicare taxes, while $50,000 of wages are subject to federal and state unemployment taxes. Tax rates are the following: • Social security tax 6.0% • Medicare tax 1.5% • State unemployment compensation tax 5.4% • Federal unemployment compensation tax 0.8% Additionally, the total amount withheld from wages for federal income taxes is $75,000 and the total amount withheld for state income taxes is $12,500. ________________________________________ When William Corp. records the journal entry to recognize payroll every two weeks, Employees’ State Income Tax Payable will be:   Question 24 options:   Debited for $12,500   Credited for $75,000   Debited for $75,000   Neither debited nor credited   Credited for $12,500

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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William Corp. pays its employees every two weeks. Employee wages earned over a two-week period is $250,000. All wages are subject to social security and Medicare taxes, while $50,000 of wages are subject to federal and state unemployment taxes. Tax rates are the following:

• Social security tax 6.0%
• Medicare tax 1.5%
• State unemployment compensation tax 5.4%
• Federal unemployment compensation tax 0.8%

Additionally, the total amount withheld from wages for federal income taxes is $75,000 and the total amount withheld for state income taxes is $12,500.

________________________________________

When William Corp. records the journal entry to recognize payroll every two weeks, Employees’ State Income Tax Payable will be:

 

Question 24 options:

 

Debited for $12,500

 

Credited for $75,000

 

Debited for $75,000

 

Neither debited nor credited

 

Credited for $12,500

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