Abe Carter Had Gross Earnings of $6,000 for the Pay

question 64

Multiple Choice

Abe Carter had gross earnings of $6,000 for the pay period ending 11/30.His total gross earnings as of 11/15 were $112,000.If Social Security taxes are 6.2% on a maximum earnings of $113,700 per year and Medicare tax is 1.45% on all earnings,the journal entry to record his earnings for the period ending 11/30 would include:

• A) a credit to Salaries Expense for $6,000
• B) a credit to Medicare Tax Payable for $870.00
• C) a credit to Social Security Tax Payable for $87.00
• D) a credit to Medicare Tax Payable for $87.00

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Definitions:

Supplies Account

An account used to track the costs of supplies that have not been consumed by the end of an accounting period.

Operating Expenses

Costs associated with the day-to-day operations of a business, such as rent, utilities, and payroll.

Operating Income

The profitability from a company's core business operations, excluding deductions of interest and taxes.

Net Profit Margin Ratio

A financial performance metric that calculates the percentage of net income to revenue, indicating how much profit a company generates from its revenues.