Question

Chec Exercise 8-7A Calculate payroll withholdings and payroll taxes (L08-3) [The following information applies to the questions displayed below) Aspen Ski Resorts has 150 employees, each working 40 hours per week and earning $15 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 765% 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 Exercise 8-7A Part 1 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 5 Total salary expense Total withholdings Actual direct deposit

Answer 1

1)
Total salary expense ( 150 employees x 40 Hours x $ 15 per Hour )	$ 90,000
Particulars	Amount (in $ )
Federal income tax ($ 90,000 x 15% )	$ 13,500
State income tax ($ 90,000 x 5% )	$ 4,500
FICA taxes ($ 90,000 x 7.65% )	$ 6,885
Total withholdings	$ 24,885
Actual direct deposit ( $ 90,000 (-) $ 24,885 )	$ 65,115

2)
Particulars	Amount (in $ )
FICA taxes ($ 90,000 x 7.65% )	$ 6,885
Unemployment taxes ($ 90,000 x 6.2% )	$ 5,580
Total payroll tax expense	$ 12,465