Chapter 11, Problem 5QS

To determine

Concept Introduction

Payroll taxes: Payroll taxes are the taxes that are paid by the employer on behalf of his employees and are calculated based on the wages or salaries of his employees.

Employee Payroll taxes: An employer is required to withhold particular taxes like Social Security and Medicare taxes from employees’ salaries and remits the same to the appropriate government. These taxes are considered as the liabilities for the employer till their payment is made by the employer.

To Prepare: The journal entry to record North Company’s January 15 (employee) payroll expenses and liabilities.