Question

QUESTION 21 Employees receive a total of $4,000 of wages for the week, Social Security (OASDI) tax of $168, Medicare (HT) tax of $58, and Federal Income Tax of $400 is withheld. The entry to record the wages expense, withholdings and net pay is: Debit Wages Expense, $3,374, Social Security Tax Expense, $168, Medicare Tax OA Expense $58, Federal Income Tax Payable $400, Credit Wages Payable, $4,000 Debit Wages Expense, $4,000; Credit Social Security Tax (OASDI) Payable, $168, Medicare (HI) Tax Payable $58, ОВ. Federal Income Tax Payable $400, Wages Payable, $3,374 OC. Debit Wages Expense, S4,000; Credit Payroll Tax Expense $626, Wages Payable, $3,374 Debit Wages Expense, $3774; Social Security Tax Expense, $168, Medicare Tax Expense $58; Credit Federal Income Tax OD. Payable $400, Credit Wages Payable, $3,600

Answer 1

(B) Debit Wages Expense, $4,000; Credit Social Security Tax (OASDI) Payable, $168, Medicare (HI) Tax Payable, $58, Federal Income Tax Payable $400, Wages Payable, $3,374

Explanation:

While recording the wages expense, all the deductions from the wages are recorded separately as a liability that is to be deposited on behalf of the employees and net wages payable is calculated after deducting all the withholdings from the total wages. However, the gross wages will be recorded as the expense in the books of accounts.