Question

Required information [The following information applies to the questions displayed below.) Aspen Ski Resorts has 150 employees, each working 40 hours per week and earning $11 an hour. Although the company does not pay any health or retirement benefits, one of the perks of working at Aspen is that employees are allowed free skiing on their days off. Federal income taxes are withheld at 15% and state income taxes at 5%. FICA taxes are 7.65% of the first $128,400 earned per employee and 1.45% thereafter. Unemployment taxes are 6.2% of the first $7,000 earned per employee. Required: 1. Compute the total salary expense, the total withholdings from employee salaries, and the actual direct deposit of payroll for the first week of January. Total salary expense Total withholdings Actual direct deposit

Answer 1

1
Total salary expense	66000	=150*40*11
Total withholdings:
Federal Income tax	9900	=66000*15%
State Income tax	3300	=66000*5%
FICA taxes	5049	=66000*7.65%
Total withholdings	18249
Actual direct deposit	47751	=66000-18249
2
Date	General Journal	Debit	Credit
January 31	Salaries expense	530000
	Income tax payable		106000
	FICA tax payable		40545	=530000*7.65%
	Salaries payable		383455
January 31	Payroll tax expense	73405
	FICA tax payable		40545
	Unemployment tax payable-Federal		4240	=530000*0.80%
	Unemployment tax payable-State		28620	=530000*5.40%