Gail's Bakery Had the Following Information Before the Pay Period

question 89

Multiple Choice

Gail's Bakery had the following information before the pay period ending June 30:
$$\begin{array} { | l | c | c | r | c | c | } \hline \begin{array} { c } \text { Employee } \\\text { Name }\end{array} & \begin{array} { c } \text { Pay } \\\text { rate }\end{array} & \begin{array} { c } \text { Hours } \\\text { worked }\end{array} & \begin{array} { c } \text { Cumulative } \\\text { earnings }\end{array} & \text { Department } & \begin{array} { c } \text { Federal } \\\text { income tax } \\\text { withheld }\end{array} \\\hline \text { P. Gardner } & \$ 2,000 & \text { Salaried } & \$ 12,000 & \text { Kitchen } & \$ 86.00 \\\hline \text { T. Bennitt } & 10.00 / \mathrm { hr } & 50 & 6,500 & \text { Office } & 22.00 \\\hline\end{array}$$
Assume:
FICA-OASDI applied to the first $117,000 at a rate of 6.2%.
FICA-Medicare applied at a rate of 1.45%.
FUTA applied to the first $7,000 at a rate of 0.8%.
SUTA applied to the first $7,000 at a rate of 5.6%.
State income tax is 3.8%.
Given the above information,what would be the amount applied to Office employee wage Expense?

• A)Debit $550
• B)Credit $550
• C)Debit $500
• D)Credit $500

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Definitions:

Net Income and Losses

The difference between total revenues and total expenses, indicating the financial performance of a company over a specific period.

Sale

A transaction between two parties where the ownership of goods, services, or assets is transferred from the seller to the buyer for an agreed amount of money or value.

Journal Entry

A record in the books of accounts that represents a business transaction and its effects on the company's finances.

Journal Entry

A record in accounting that represents a transaction and its effect on various accounts, used to transfer amounts from one account to another.