As of February 28, American Greetings Corporationhad 7,400 full-time and 17,400 part-time employees.Assume that in the last pay period of the year, thecompany paid $8,000,000 to employees after deducting$2,000,000 for employee income taxes, $612,000 forFICA taxes, and $700,000 for other purposes. No payments have been made to the government relating to thesetaxes. Which of the following statements is true regardingthis pay period?a. FICA Taxes Payable should be $612,000.b. FICA Taxes Payable should be $1,224,000.c. Salaries and Wages Expense should be $8,000,000.d. None of the above is true.

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Payroll Entries

Payroll is a comprehensive record of employees that are paid by the company. Payroll classifies employees into various categories according to their function and pays scale (basic wage, allowance, income tax, other taxes, employee loans, etc.). Payroll processes form the bedrock of every organization as it contains sensitive information on the ‘wage and paycheck’ portion of the company’s strength—its employees. The organization needs to keep a track of the employees currently on the payroll, the net payout for the company, the record of transactions related to the employees including deductions and payroll taxes to identify the liability and its effect on the balance sheet (and other financial statements). Payroll records also include qualitative factors such as the conduct of the employee.