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a. OASDI tax b. HI tax 44

a. OASDI tax b. HI tax 44

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Problem Information Use the following tax rates, ceiling and maximum taxes: Employee and Employer OASDI: Employee* and Employer HI: Self-employed OASDI: Self-employed HI: *Employee HI: Plus an additional 0.9% on wages over $200,000. Also applicable to self-employed. 6.20% 1.45% 12.4% a. OASDI tax b. HI tax 2.9% $147,000 No limit $147,000 No limit $9,114.00 No maximum $18,228.00 No maximum Rounding Rules: Unless instructed otherwise compute hourly rate and overtime rates as follows: 1. Carry the hourly rate and the overtime rate to 3 decimal places and then round off to 2 decimal places (round the hourly rate to 2 decimal places before multiplying by one and one-half to determine the overtime rate). 2. If the third decimal place is 5 or more, round to the next higher cent. 3. If the third decimal place is less than 5, drop the third decimal place. Also, use the minimum hourly wage of $7.25 in solving these problems and all that follow. On the last weekly pay of the first quarter, Lorenz is paid her current pay of $90 per day for four days worked and one day sick pay (total $450). Sh is also paid her first-quarter commission of $1,200 in this pay. How much will be deducted for: Round your answers to the nearest cent.
Transcribed Image Text:Problem Information Use the following tax rates, ceiling and maximum taxes: Employee and Employer OASDI: Employee* and Employer HI: Self-employed OASDI: Self-employed HI: *Employee HI: Plus an additional 0.9% on wages over $200,000. Also applicable to self-employed. 6.20% 1.45% 12.4% a. OASDI tax b. HI tax 2.9% $147,000 No limit $147,000 No limit $9,114.00 No maximum $18,228.00 No maximum Rounding Rules: Unless instructed otherwise compute hourly rate and overtime rates as follows: 1. Carry the hourly rate and the overtime rate to 3 decimal places and then round off to 2 decimal places (round the hourly rate to 2 decimal places before multiplying by one and one-half to determine the overtime rate). 2. If the third decimal place is 5 or more, round to the next higher cent. 3. If the third decimal place is less than 5, drop the third decimal place. Also, use the minimum hourly wage of $7.25 in solving these problems and all that follow. On the last weekly pay of the first quarter, Lorenz is paid her current pay of $90 per day for four days worked and one day sick pay (total $450). Sh is also paid her first-quarter commission of $1,200 in this pay. How much will be deducted for: Round your answers to the nearest cent.
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