Question

Required information The following information applies to the questions displayed below Aspen Ski Resorts has 100 employees, each working 40 hours per week and earning $14 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 eamed per employee and 1.45% thereafterUnemployment 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 5

Answer 1

1
Total salary expense	56000	=100*40*14
FICA taxes	4284	=56000*7.65%
Federal Income taxes	8400	=56000*15%
State Income taxes	2800	=56000*5%
Total withholdings	15484
Actual direct deposit	40516	=56000-15484
2
FICA taxes	4284	=56000*7.65%
Unemployment taxes	3472	=56000*6.2%
Total payroll tax expense	7756
3
NO accounting entry required