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

Question

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

Quizplus · Accepted Answer

The employer's payroll taxes include Social Security and Medicare taxes (matching the employee's portion of $1,125) and unemployment taxes (6.2% of $4,000, which is $248). Therefore, the total payroll tax expense is $1,125 + $248 = $1,373.

The Following Totals for the Month of June Were Taken