Question

Cado Co.'s payroll for the month ended January 31 is summarized as follows:Total wages $100,000Amount of wages subject to payroll taxes:FICA 80,000Unemployment 20,000Payroll tax rates:FICA for employer and employee 7% eachUnemployment 3%In its January 31 balance sheet, what amount should Cado accrue as its share of payroll taxes?A. $6,200B. $10,000C. $11,800D. $17,000

Answer 1

A. $6,200

Step-by-step explanation:

We multiply the taxable wages by the tax rate of each tax.

FICA 80,000 x 7% = 5,600

Unemployment 20,000 x 3% = 600

This will be share of Cado in the payroll taxes. 6,200

The total taxes, would include the employee FICA. but we aren't asked for that. Just for the employee