For the week ended June 30, Fox Co. paid gross wages of $40,000, from which fede
ID: 2511040 • Letter: F
Question
For the week ended June 30, Fox Co. paid gross wages of $40,000, from which federal income taxes of $5,000 and FICA were withheld. All wages paid were subject to FICA tax rates of 7% each for employer and employee. Fox makes all payroll-related disbursements from a special payroll checking account. What amount should Fox have deposited in the payroll checking account to cover net payroll and related payroll taxes for this week? $50,600 $45,600 $47,800 $42,800 For the week ended June 30, Fox Co. paid gross wages of $40,000, from which federal income taxes of $5,000 and FICA were withheld. All wages paid were subject to FICA tax rates of 7% each for employer and employee. Fox makes all payroll-related disbursements from a special payroll checking account. What amount should Fox have deposited in the payroll checking account to cover net payroll and related payroll taxes for this week? $50,600 $45,600 $47,800 $42,800 For the week ended June 30, Fox Co. paid gross wages of $40,000, from which federal income taxes of $5,000 and FICA were withheld. All wages paid were subject to FICA tax rates of 7% each for employer and employee. Fox makes all payroll-related disbursements from a special payroll checking account. What amount should Fox have deposited in the payroll checking account to cover net payroll and related payroll taxes for this week? $50,600 $45,600 $47,800 $42,800Explanation / Answer
SOLUTION
Choice "D" is correct. $42,800 is the net payroll and related employer FICA payroll taxes. The amount is calculated as follows:
Amount ($) Amount ($) Gross wages 40,000 Employer FICA tax Wages 40,000 FICA rate 7% 2,800 Net payroll & employer FICA 42,800