Question

Accurate Reports has 70 employees each working 40 hours per week and earning $25 an hour. Federal income taxes are withheld at 15% and state income taxes at 6%. FICA taxes are 7.65% of the first $118,500 earned per employee and 1.45% thereafter. Unemployment taxes are 6.20% of the first $7,000 earned per employee.  

1. Compute the total salaries expense, the total withholdings from employee salaries, and the actual payroll payment (salaries payable) for the first week of January. (Round your intermediate and final answers to the nearest dollar amount.)

2. Compute the total payroll tax expense Accurate Reports will pay for the first week of January. (Round your intermediate and final answers to the nearest dollar amount.)

Answer 1

Part-1
	Amount($)	Amount($)
Total Salary expense(70Employee*40 Hour*$25)		70,000
Less: With holdings:
Federal income taxes(70,000*15%)	10,500
State income taxes(70,000*6%)	4,200
FICA taxes (70,000*7.65%)	5,355
Total with holdings		20,055
Actual direct deposit of payroll		49,945
Part-2: Computation of Total Payroll Tax Expense
	Taxable earnings	Payroll tax
	Amount($)	Amount($)
FICA (70,000*7.65%)	70,000	5,355
Unemployment taxes(70,000*6.2%)	70,000	4,340
Total Payroll Tax Expense		9,695