The following totals for the month of June were taken from the payroll register of Young Company:?? $$\begin{array} { l r }
\text { Salaries expense } & \$ 15,000 \
\text { Social security and Medicare taxes withheld } & 1,125 \
\text { Income taxes withheld } & 3,000 \
\text { Retirement savings } & 500 \
\text { Salaries subject to federal and state } & \
\quad \text { unemployment taxes of } 6.2 \% & 4,000
\end{array}$$ The entry to record the accrual of the employer's payroll taxes would include a debit to
A) Payroll Tax Expense for $2,498
B) Social Security and Medicare Tax Payable for $2,250
C) Payroll Tax Expense for $1,373
D) Payroll Tax Expense for $3,000

Question

The following totals for the month of June were taken from the payroll register of Young Company:?? $$\begin{array} { l r } 
\text { Salaries expense } & \$ 15,000 \
\text { Social security and Medicare taxes withheld } & 1,125 \
\text { Income taxes withheld } & 3,000 \
\text { Retirement savings } & 500 \
\text { Salaries subject to federal and state } & \
\quad \text { unemployment taxes of } 6.2 \% & 4,000
\end{array}$$ The entry to record the accrual of the employer's payroll taxes would include a debit to
A) Payroll Tax Expense for $2,498
B) Social Security and Medicare Tax Payable for $2,250
C) Payroll Tax Expense for $1,373
D) Payroll Tax Expense for $3,000

Quizplus · Accepted Answer

The employer's payroll taxes typically include the employer's share of Social Security and Medicare taxes, which are equal to the amounts withheld from employees (in this case, $1,125), and federal and state unemployment taxes. The unemployment taxes are calculated on the $4,000 of salaries subject to these taxes at a rate of 6.2%, which equals $248 ($4,000 * 6.2% = $248). Therefore, the total payroll tax expense for the employer is $1,125 (Social Security and Medicare) + $248 (unemployment taxes) = $1,373.

The Following Totals for the Month of June Were Taken