Asked by Gisselle Leyva on May 02, 2024
Verified
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
Payroll Tax Expense
This refers to the taxes that an employer is responsible for paying on behalf of its employees, which generally include social security and Medicare taxes.
FICA Taxes Payable
Taxes owed by an employer, employee, or both, to the Federal Insurance Contributions Act for Social Security and Medicare.
Employer's Payroll Taxes
Taxes that an employer must pay based on the wages and salaries of its employees, which can include Social Security taxes, Medicare taxes, and unemployment taxes.
- Understand the employer's payroll tax liabilities and the related accounting entries.
Verified Answer
BM
Bryan Martinez RodasMay 03, 2024
Final Answer :
D
Explanation :
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.
Learning Objectives
- Understand the employer's payroll tax liabilities and the related accounting entries.