Red Mountain,Inc.has the following information from its payroll records: The employer amount of FICA taxes that Red Mountain is required to pay is equal to the amount that it withholds from its employees.Assume no other payroll taxes are incurred at this time.What is Red Mountain's total expense with regards to this payroll?
A)$144,000
B)$153,000
C)$180,000
D)$189,000

Question

Red Mountain,Inc.has the following information from its payroll records:  The employer amount of FICA taxes that Red Mountain is required to pay is equal to the amount that it withholds from its employees.Assume no other payroll taxes are incurred at this time.What is Red Mountain's total expense with regards to this payroll?
A)$144,000 
B)$153,000 
C)$180,000 
D)$189,000

Quizplus · Accepted Answer

The employee income taxes and FICA taxes withheld are not an expense of the employer.Total payroll expense (relating to this transaction only)= Salaries and wages earned by employees of $180,000 + Employer amount of FICA of $9,000 = $189,000.