Asked by Cecilee Humphries on May 01, 2024
Verified
The following totals for the month of February were taken from the payroll register of Arcon Company:? Salaries expense $13,000 Social security and Medicare taxes withheld 975 Income taxes withheld 2,600 Retirement savings 500 Salaries subject to federal and state unemployment 4,000 taxes of 6.2%\begin{array}{l}\begin{array}{lr}\text { Salaries expense } & \$ 13,000 \\\text { Social security and Medicare taxes withheld } & 975 \\\text { Income taxes withheld } & 2,600 \\\text { Retirement savings } & 500 \\\text { Salaries subject to federal and state unemployment } & 4,000\end{array}\\\text { taxes of } 6.2 \%\end{array} Salaries expense Social security and Medicare taxes withheld Income taxes withheld Retirement savings Salaries subject to federal and state unemployment $13,0009752,6005004,000 taxes of 6.2% (a) How much is the total payroll tax expense for Arcon Company for this payroll?
(b) Assume that the monthly salaries expense remains the same for the entire year and no employees are hired or fired during that time. Based on what you learned in Chapter 11 about payroll taxes, do you expect the total payroll tax expense to stay the same every month? Explain.
Payroll Tax Expense
Taxes that are paid based on the salary and wages of employees, including social security, medicare, and federal and state unemployment taxes.
Social Security And Medicare Taxes
Mandatory payroll taxes collected from employers and employees in the United States to fund the Social Security and Medicare programs.
Salaries Expense
The total amount paid to employees for their services over a specific period, classified as an operating expense on the income statement.
- Comprehend techniques for computing and documenting the payroll taxes of employers under various situations.
- Gain insight into the handling of employee earnings, taxes withheld, and associated employer taxes.
Verified Answer
ZK
Zybrea KnightMay 05, 2024
Final Answer :
(a) Total payroll expense: $975 matching social security and Medicare taxes + $248 ($4,000 × 6.2%) unemployment taxes = $1,223??
(b) Total payroll tax expense is not expected to stay the same every month. The salaries subject to unemployment taxes should soon be zero, and it is possible that some employees may exceed the limit for social security tax before the year ends, so total payroll tax expense should decrease.
(b) Total payroll tax expense is not expected to stay the same every month. The salaries subject to unemployment taxes should soon be zero, and it is possible that some employees may exceed the limit for social security tax before the year ends, so total payroll tax expense should decrease.
Learning Objectives
- Comprehend techniques for computing and documenting the payroll taxes of employers under various situations.
- Gain insight into the handling of employee earnings, taxes withheld, and associated employer taxes.