value 2.22 points M10-3 Calculating Net Pay and Total Payroll Costs [LO 10-2] Li

Question

value 2.22 points M10-3 Calculating Net Pay and Total Payroll Costs [LO 10-2] 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 $70,000 but that employee income taxes totaling $9,000 and FICA taxes totaling $3,625 were withheld from this amount. The net pay was directly deposited into the employees' bank accounts. . What was the amount of net pay? Net Pay 2. Assuming Lightning Electronics must also pay $450 of unemployment taxes for this pay period, what amount would be reported as the total payroll costs? Total Payroll Costs

Explanation / Answer

1. Net Pay = Gross salaries & wages - Employee income tax withheld - Employee FICA withheld = $70,000 - $9,000 - $3,625 = $57,375

2. Total payroll costs would include the gross pay ($70,000) as well as the additional employer payroll taxes ($3,625 FICA) and unemployment taxes ($450). In total, Lightning Electric would report $74,075 as the total payroll cost for this pay period.

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