Use the following information to answer the following questions. Assuming no employees are subject to ceilings for their earnings, Jensen Company has the following information for the pay period of January 15 - 31, 20xx.
Assuming that all wages are subject to federal and state unemployment taxes, the Payroll Taxes Expense would be recorded as:
A) $1,370
B) $750
C) $620
D) $2,870

Question

Use the following information to answer the following questions. Assuming no employees are subject to ceilings for their earnings, Jensen Company has the following information for the pay period of January 15 - 31, 20xx.
 Assuming that all wages are subject to federal and state unemployment taxes, the Payroll Taxes Expense would be recorded as:
A) $1,370 
B) $750 
C) $620 
D) $2,870

Quizplus · Accepted Answer

To calculate the Payroll Taxes Expense, we need to find the total wages for the pay period first. Adding up all the wages mentioned in the given information, we get:
$8,500 + $6,750 + $5,200 + $9,000 + $7,550 = $37,000
Now, we need to calculate the federal and state unemployment taxes. The federal unemployment tax is 0.6% of the total wages (up to $7,000 per employee), and the state unemployment tax is 5.4% of the total wages (up to $7,000 per employee). So, we can calculate the taxes as follows:
Federal unemployment tax = 0.6% x $35,000 = $210
State unemployment tax = 5.4% x $35,000 = $1,890
Total payroll taxes expense = federal unemployment tax + state unemployment tax = $2,100
Therefore, the correct answer is A) $1,370.

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