Question

Action Travel has 10 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% and unemployment taxes are 3.8% of the first $7,000 earned per employee. What is the actual direct deposit of payroll for the first week of January?

Group of answer choices $10,000. $6,755. $7,135. $5,990.

Answer #1

Answer:

The actual payroll payment is $7135

Explanation:

The actual payroll payment involves deducting from the gross pay of the 10 employees the federal income taxes at 15%,state income taxes at 6% as well as the FICA taxes at 7.65%.

The actual payroll payment implies the actual cash handed to the employees or credited to their bank accounts at the end of the month,which is computed below:

Total payroll expense (10*40*$25) $10,000

Federal income taxes(15%*$10000) ($1,500)

State income taxes(6%*$10000) ($600)

FICA taxes(7.65%*$10,000) ($765 )

Actual payroll payment $7135

QUESTION HAS 2 PARTS
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Hours
Employee
M
T
W
T
F
S
Hourly Rate
Federal Income Tax Withholding
Health Insurance
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9
8
8
8
10
2
$12
$32
$10
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7
9
7
7
7
5
14
36
27
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10
11
8
8
9
0
15
57
26
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