The EarthReady Corporation manufactures environmentally safe light bulbs. Samuel, the accountant, is preparing month end journal entries. The payroll journal entry for the month includes the following:Cash $80, 608.10; Work in Process $68, 160; Factory Overhead $29, 270; Employee Income Tax Payable $9627.50; Social Security Tax Payable $5032.95; and Medicare Tax Payable $2161.45. Which accounts should be debited?

INTRODUCTION TO COST ACCOUNTING

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

A	Cash, Work In Process and Factory Overhead
B	Work in Process and Factory Overhead
C	Cash and Factory Overhead
D	Employee Income Tax payable, Social Security Tax Payable, and Medicare Tax Payable

Explanation:

Detailed explanation-1: -A payroll journal entry is a record of how much you pay your employees and your overall payroll expenses. That way, you can look back and see details about employee compensation, such as when you paid it, how much it was, and where the money went.

Detailed explanation-2: -A payroll journal entry is a record of employee earnings for an accounting period. An accountant typically includes these entries in the company’s general ledger before its financial statements. This way, they can help ensure accurate financial statements, such as balance sheets and income statements.

Detailed explanation-3: -Debit the wages, salaries, and company payroll taxes you paid. This will increase your expenses for the period. When you record payroll, you generally debit Gross Wage Expense and credit all of the liability accounts.

There is 1 question to complete.