Question

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 $51,000 but that employee income taxes totaling $7,100 and FICA taxes totaling $2,675 were withheld from this amount. The net pay was directly deposited into the employees’ bank accounts. Required: What was the amount of net pay? Assuming Lightning Electronics also must pay $260 of unemployment taxes for this pay period, what amount would be reported as the total payroll costs? 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 $51,000 but that employee income taxes totaling $7,100 and FICA taxes totaling $2,675 were withheld from this amount. The net pay was directly deposited into the employees’ bank accounts. Required: What was the amount of net pay? Assuming Lightning Electronics also must pay $260 of unemployment taxes for this pay period, what amount would be reported as the total payroll costs?

Answer 1

1
Gross earnings	51000
Less: Employee income taxes	7100
Less: FICA taxes	2675
Net pay	41225
2
Gross earnings	51000
Add: FICA taxes	2675
Add: Unemployment taxes	260
Total payroll costs	53935