The Payroll Summary for December 31 for Waters Co

question 32

Essay

The payroll summary for December 31 for Waters Co. revealed total earnings of $80,000. Earnings subject to 6% social security tax were $60,000; earnings subject to 1.5% Medicare tax were $80,000; and earnings of $3,000 were subject to 4.3% state and 0.8% federal unemployment compensation tax. Journalize the entry to record the accrual of payroll taxes.

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Definitions:

Minimum Efficient Scale

The smallest scale of production at which long-term average costs are minimized, reflecting the point at which economies of scale are fully exploited.

Exclusive Legal Right

An exclusive legal right is a privilege granted by law to an individual or entity to engage in a particular activity or to use a particular property, which is protected against infringement or unauthorized use by others.

Patent

is a legal right granted to an inventor or assignee, providing exclusive rights to make, use, or sell an invention for a certain number of years in exchange for public disclosure of the invention.

Pure Monopolist

A market situation where a single seller controls all the supply of a product or service with no close substitutes.