The following totals for the month of March were taken from the payroll records of Kern Company. $$\begin{array} { l r }
\text { Salaries } & \$ 270,000 \
\text { FlCA taxes withheld } & 20,655 \
\text { Income taxes withheld } & 59,400 \
\text { Medical insurance deductions } & 3,915 \
\text { Federal unemployment taxes } & 2,160 \
\text { State unemployment taxes } & 13,500
\end{array}$$ The entry to record accrual of employer's payroll taxes would include a
A)debit to Payroll Tax Expense for $36,315
B)debit to Payroll Tax Expense for $95,715
C)debit to FICA Taxes Payable for $20,655.
D)credit to Payroll Tax Expense for $36,315.

Question

The following totals for the month of March were taken from the payroll records of Kern Company. $$\begin{array} { l r } 
\text { Salaries } & \$ 270,000 \
\text { FlCA taxes withheld } & 20,655 \
\text { Income taxes withheld } & 59,400 \
\text { Medical insurance deductions } & 3,915 \
\text { Federal unemployment taxes } & 2,160 \
\text { State unemployment taxes } & 13,500
\end{array}$$ The entry to record accrual of employer's payroll taxes would include a
A)debit to Payroll Tax Expense for $36,315
B)debit to Payroll Tax Expense for $95,715
C)debit to FICA Taxes Payable for $20,655.
D)credit to Payroll Tax Expense for $36,315.

Quizplus · Accepted Answer

The entry to record accrual of employer's payroll taxes would include a debit to Payroll Tax Expense for $36,315. This is because the employer is responsible for paying both the employee and employer portions of FICA taxes and unemployment taxes. The total amount of employer payroll taxes is $36,315 ($20,655 + $2,160 + $13,500).

The Following Totals for the Month of March Were Taken