Dooley Publishing Has the Following Payroll Data for Its July

question 36

Multiple Choice

Dooley Publishing has the following payroll data for its July 1 pay date: How much Federal withholding tax was deducted from employees' pay?
$$\begin{array} { | l | l | l | c | r | r | } \hline \text { Jul } & 1 & \text { Wages and salaries expense } & 522 & \$ \quad 182,930.00 & \\\hline & & \text { Federal withholding taxpayable } & 220 & & \$ ? ? ? \\\hline & & \text { Social Security tax payable } & 221 & & 10,517.12 \\\hline & & \text { Medicare tax payable } & 222 & & 2,459.65 \\\hline & &401 ( k ) \text { contributions payable } & 223 & & 6402.55 \\\hline & &\text { Health Insurance payable } & 224 & & 13,299.01 \\\hline & &\text { Union Dues payable } & 227 & & 4,573.25 \\\hline & & \text { Wages and salaries payable } & 226 & & 113,562.94 \\\hline & & & & \\\hline \text { Jul } & 1 & \text { Wages and salaries payable } & 226 & 113,562.94 & \\\hline & & \text { Cash } & 101 & & 113,562.94 \\\hline\end{array}$$

• A) $15,203.14
• B) $42,083.87
• C) $32,115.48
• D) $29,391.98

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Definitions:

Diminishing Marginal Rate

The principle that as the quantidade of a variable input increases, with all other inputs fixed, a point will be reached where the additions to output will begin to decrease.

Substitution

The economic principle describing how consumers or producers replace one good or service with another in response to changes in price or other factors.

Substitution Effect

The substitution effect describes a change in consumption patterns due to shifts in relative prices, where consumers prefer cheaper alternatives when the price of a good rises, keeping their utility level constant.

Inferior Good

A type of good for which demand decreases as the income of the consumer increases, in contrast to a normal good.