An employee works 37 regular hours during a workweek in August of 2021. He was hired four years ago, earns a salary of $140,200/year, and is exempt from the overtime provisions of the FLSA. To date, he has received no compensation beyond his annual salary. He has requested that his employer withhold 8% of gross pay, which is to be contributed to a 401(k) plan.
An employee works 37 regular hours during a workweek in August of 2021. He was hired four years ago, earns a salary of $140,200/year, and is exempt from the overtime provisions of the FLSA. To date, he has received no compensation beyond his annual salary. He has requested that his employer withhold 8% of gross pay, which is to be contributed to a 401(k) plan.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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An employee works 37 regular hours during a workweek in August of 2021. He was hired four years ago, earns a salary of $140,200/year, and is exempt from the overtime provisions of the FLSA. To date, he has received no compensation beyond his annual salary. He has requested that his employer withhold 8% of gross pay, which is to be contributed to a 401(k) plan.
Expert Solution
Step 1 Weekly pay of the Employee
| Salary = $ 140200/year. 8% deduction for 401 (K) Plan |
| Taxable income for federal income tax withholding |
| 140200 - 8% of 140200 |
| $128984 |
| $128984 Is the annual amount |
| Divide this by 52 to get weekly amount i.e. 128984 / 52 = $ 2480.46 |
Weekly pay is $2480.46 in this case.
401(K) Plan.
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