Manufacturing Company has labor costs as follows: Gross Wages Factory$1,000,000 Net Wages Factory840,000 Employee Payroll Taxes Payable 100,000 you want to record the cost of factory labor and payroll tax expense. The debit to factory labor would be:

The debit of $1,100,000 is posted to factory labor

Explanation:

The debit to factory labor would comprises of the gross wages and employee payroll taxes payable as the cost of factory labor should reflect the company's total costs incurred for the relevant period.

Debit to factory labor=$1,000,000+$100,000

                                   =$1,100,000

There are some certain deductions taken from wages and salaries before the remnant is paid to employees such as contribution to pension scheme,the fact that such deductions are not paid to employees now  does not mean it should be excluded from total cost of labor as it is a part and parcel of payroll expenses.

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