Assignment: For the current month, Johansen Rubber Cement Co. incurred payroll expenses as follows:
Gross salaries and wages $675,000
Payroll Taxes:
OASDI (Social Security Tax) employer's share $41,850
HI (Medicare tax)--employer's share $9,788
Total: $726,638
Amounts withheld and paid to the government:
Employee income taxes withheld $(108,990)
OASDI--employees's share $(41,850)
HI--employees's share $(9,788)
Total: $(160,628)
Question 1: What amount can Johansen Rubber Cement Co. claim as a tax deduction for salary and wage expense?
Question 2: How much can Johansen Rubber Cement Co. deduct as tax expense?