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Lightning Electronics is a midsize manufacturer of lithium batteries. The company’s payroll records for the November...

Lightning Electronics is a midsize manufacturer of lithium batteries. The company’s payroll records for the November 1–14 pay period show that employees earned wages totaling $56,000 but that employee income taxes totaling $7,600 and FICA taxes totaling $2,925 were withheld from this amount. The net pay was directly deposited into the employees’ bank accounts. 1. What was the amount of net pay? 2. Assuming Lightning Electronics must also pay $310 of unemployment taxes for this pay period, what amount would be reported as the total payroll costs?

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Answer #1
Net Pay to employees:
Gross earnings of the employees: 56000
Less: Taxes withheld
FICA taxes 2925
Income tax withheld 7600 10525
Net Pay to employees 45475
Total Payroll cost:
Gross earnings paid to employees 56000
Add: Additional Payroll taxes expense
FICA taxes 2925
Unemployment taxes 310 3235
Total Payroll cost: 59235
Note: Equal contribution need to be made by employer for FICA taxes
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