Question

The following totals for the month of April were taken from the payroll records of Sage Hill Company. 

Salaries                                        $98400

FICA taxes withheld                        7530

Income taxes withheld                    20500

Medical insurance deductions          3700

Federal unemployment taxes            260

State unemployment taxes              1770 

The entry to record accrual of employer's payroll taxes would include a 

 debit to Payroll Tax Expense for $2030. 

 credit to Payroll Tax Expense for $2030. 

 debit to Payroll Tax Expense for $9560. 

 credit to FICA Taxes Payable for $15060.

Answer 1

Income taxes, Medical insurance and FICA taxes are paid by employees.

Employer is liable to pay the following taxes:

(i) FICA taxes as paid by employees

(ii) Federal unemployment taxes

(iii) State unemployment taxes

The entry to record accrual of employer's payroll taxes would be as under:

Date	Account title	Debit	Credit
	Payroll tax expense	9,560
	FICA taxes payable		7,530
	Federal unemployment taxes payable		260
	State unemployment taxes payable		1,770
	(To record accrual of employer's payroll taxes)

Hence, third option is correct.