The following information was obtained from Knox Company's income statement for 20-2, balance sheets as of December 31, 20-2 and 20-1, and auxiliary records: Operating expenses for 20-2 $356,290 Depreciation expense for 20-2 22,370 (Included in operating expenses.) 20-2 20-1 Supplies and prepayments $10,940 $7,470 Accrued and withheld payroll taxes 3,100 4,060 Compute the amount of cash paid for operating expenses in 20-2.

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A: Entries are provided below.Explanation:

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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.