According to a Summary of the Payroll of Scotland Company

question 17

Essay

According to a summary of the payroll of Scotland Company, salaries for the period were $500,000. Federal income tax withheld was $98,000. Also, $15,000 was subject to state (5.4%) and federal (0.8%) unemployment taxes. All earnings are subject to social security tax of 6.0% and Medicare tax of 1.5%.
​ (a) Joumalize the entry to record the accrual of payroll. If required, round your answers to the nearest cent.
(b) Journalize the entry to record the accrual of payroll taxes. If required, round your answers to the nearest cent.

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Definitions:

Break-even Point

The point at which total revenues equal total costs, and the business makes neither a profit nor a loss.

Margin Of Safety

The difference between actual or expected sales and the break-even point, indicating the amount by which sales can drop before losses begin.

Volume Of Sales

The total quantity of goods or services sold by a company within a specific period.

Break-even Point

The level of production or sales at which total revenues equal total expenses, resulting in neither profit nor loss.