Oaks Company has completed the payroll for the month of January, reflecting the following data:

Required:
1. What was the total labor cost to the company? What was the amount of the employees’ take-home pay?
2. List the liabilities and their amounts reported on the company’s January 31 balance sheet, assuming the employees have been paid but that no transfers have been made to government agencies.
3. A junior accountant at Oaks stated in a meeting that giving all employees a 5 percent raise would have cost Oaks $4,300 ($86,000 × 0.05) in the month of January. Do you agree?

Transcribed Image Text:

Salaries and wages earned Employee income taxes withheld FICA payroll taxes* *Assessed on both employer and employee (i.e., $6,000 each). $86,000 10,000 6,000