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.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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As of February 28, American Greetings Corporation
had 7,400 full-time and 17,400 part-time employees.
Assume that in the last pay period of the year, the
company paid $8,000,000 to employees after deducting
$2,000,000 for employee income taxes, $612,000 for
FICA taxes, and $700,000 for other purposes. No payments have been made to the government relating to these
taxes. Which of the following statements is true regarding
this 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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