Use this information for Magnum Company to answer the following questions.

The following totals for the month of April were taken from the payroll register of Magnum Company:

$$\begin{array} { l r }
\text { Salaries } & \$ 12,000 \
\text { FICA taxes withheld } & 900 \
\text { Income taxes withheld } & 2,500 \
\text { Medical insurance deductions } & 450 \
\text { Federal unemployment taxes } & 32 \
\text { State unemployment taxes } & 216
\end{array}$$
-The entry to record the accrual of the employer's payroll taxes would include a
A) debit to Payroll Tax Expense for $2,500
B) debit to FICA Taxes Payable for $1,800
C) credit to Payroll Tax Expense for $248
D) debit to Payroll Tax Expense for $1,148

Question

Use this information for Magnum Company to answer the following questions.
​
The following totals for the month of April were taken from the payroll register of Magnum Company:
​
​
 $$\begin{array} { l r } 
\text { Salaries } & \$ 12,000 \
\text { FICA taxes withheld } & 900 \
\text { Income taxes withheld } & 2,500 \
\text { Medical insurance deductions } & 450 \
\text { Federal unemployment taxes } & 32 \
\text { State unemployment taxes } & 216
\end{array}$$ ​
-The entry to record the accrual of the employer's payroll taxes would include a
A) debit to Payroll Tax Expense for $2,500
B) debit to FICA Taxes Payable for $1,800
C) credit to Payroll Tax Expense for $248
D) debit to Payroll Tax Expense for $1,148

Quizplus · Accepted Answer

The employer's payroll taxes typically include their portion of FICA taxes, federal unemployment taxes, and state unemployment taxes. The FICA taxes withheld from employees are matched by the employer, making the employer's portion also $900. Adding the federal unemployment taxes ($32) and state unemployment taxes ($216) gives a total of $1,148 ($900 + $32 + $216) that the employer owes in payroll taxes. This amount is debited to Payroll Tax Expense to record the accrual of the employer's payroll taxes.

Use This Information for Magnum Company to Answer the Following