The following totals for the month of June were taken from the payroll register of Young Company: $\begin{array}{lr}
\text { Sal aries expense } & \$ 15,000 \
\text { Social security and Medicare taxes withheld } & 1,125 \
\text { Income taxes withheld } & 3,000 \
\text { Retirement savings } & 500\
\text { Salaries subject to federal and state }\
\text { unemployment taxes of } 6.2 \text { percent }&4,000
\end{array}$
The entry to record the accrual of 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

Quizplus · Accepted Answer

The employer's payroll taxes typically include their portion 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 on the salaries subject to these taxes. The unemployment taxes are calculated at 6.2% of $4,000, which equals $248 ($4,000 * 6.2% = $248). Therefore, the total payroll tax expense for the employer would be $1,125 (Social Security and Medicare) + $248 (unemployment taxes) = $1,373.

The Following Totals for the Month of June Were Taken