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Question 1: Vaughn incurs a weekly payroll of $255000 that includes federal taxes withheld of $37600, FICA taxes withheld of $23670, and 401(k) withholdings of $27000. What is the effect on assets and liabilities from recording this transaction? (Ignore company payroll taxes).
Option 1: Assets decrease $193730 and liabilities decrease $61270.Option 2: Assets decrease $166730 and liabilities increase $88270.Option 3: Assets decrease $193730 and liabilities increase $61270.Option 4: Assets decrease $255000 and liabilities do not change.
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