Reducto Co

Multiple Choice

Reducto Co. pays a weekly payroll of $95,000 that includes federal taxes withheld of $12,000 FICA taxes withheld of $7,250, and retirement withholdings of $6,000. What is the effect on assets and liabilities from this transaction?

A) Assets decrease $95,000 and liabilities decrease $69,750.
B) Assets decrease $95,000 and liabilities increase $95,000.
C) Assets decrease $69,750 and liabilities decrease $25,250.
D) Assets decrease $69,750 and liabilities increase $25,250.