### Understanding Federal Income Tax Withholding for Must Co.**Scenario:**Assume that the MUST Co. pays a weekly payroll. Using the portion of the Wage Bracket Withholding Table given, we need to determine the amount of federal income tax to withhold for this pay period for a single employee whose gross earning is $2,250 and who claimed 2 withholding allowances.#### Table for Percentage Method of Withholding**WEEKLY Payroll Period****SINGLE person (including head of household)** - Assume the deduction for each withholding allowance is $75.The table below outlines the amount of income tax to be withheld based on the range of wages (after subtracting withholding allowances):| If the amount of wages (after subtracting withholding allowances) is: | The amount of income tax to withhold ||---|---|| Not over $43 | $0 || Over $43 but not over $222 | $0.00 plus 10% of excess over $43 || Over $222 but not over $767 | $17.90 plus 15% of excess over $222 || Over $767 but not over $1,796 | $99.65 plus 25% of excess over $767 || Over $1,796 but not over $3,700 | $356.90 plus 28% of excess over $1,796 || Over $3,700 but not over $7,992 | $890.12 plus 33% of excess over $3,700 || Over $7,992 but not over $8,025 | $2,306.38 plus 35% of excess over $7,992 || Over $8,025 | $2,317.93 plus 39.6% of excess over $8,025 |**Calculation:**1. Gross earnings: $2,2502. Subtract withholding allowances: 2 allowances * $75 = $1503. Amount after allowances: $2,250 - $150 = $2,100We now consult the table to find the relevant tax bracket for $2,100:- According to the table, $2,100 falls under the wage range of "Over $1,796 but not over $3,700".So, we use the formula specific to that range:\[ \text{Federal Income Tax} = \$356.90 + 28\% \text

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Assume that the MUST Co. pays a weekly payroll. Using the portion of the Wage Bracket Withholding Table given, what would be the amount of federal income tax to withhold for this pay period for a single employee whose gross earning is $2,250 and who counted 2 withholding allowance? Table for Percentage Method of Withholding WEEKLY Payroll Period SINGLE person(including head of household)-- Assume the deduction for each withholding allowance is $75. If the amount of wages (after subtracting withholding allowances) is: The amount of income tax to withhold is $0 Not over $43. . . ver--- But not over-- of excess over-- $43 --$222 | $ 0.00 plus 10% ---$43 $222 ---$767 $17.90 plus 15% --$222 $767 --$1,796| $99.65 plus 25% ---$767 $1,796 --$3,700 $356.90 plus 28% ---$1,796 $3,700 ---87,992 | $890.12 plus 33% --S3,700 $7,992 ---$8,025 | $2,306.38 plus 35% ---$7,992 $8,025 $2,317.93 plus 39.6% ---$8,025 $356.90 $442.02 $484.02 $630.00

Assume that the MUST Co. pays a weekly payroll. Using the portion of the Wage Bracket Withholding Table given, what would be the amount of federal income tax to withhold for this pay period for a single employee whose gross earning is $2,250 and who counted 2 withholding allowance? Table for Percentage Method of Withholding WEEKLY Payroll Period SINGLE person(including head of household)-- Assume the deduction for each withholding allowance is $75. If the amount of wages (after subtracting withholding allowances) is: The amount of income tax to withhold is $0 Not over $43. . . ver--- But not over-- of excess over-- $43 --$222 | $ 0.00 plus 10% ---$43 $222 ---$767 $17.90 plus 15% --$222 $767 --$1,796| $99.65 plus 25% ---$767 $1,796 --$3,700 $356.90 plus 28% ---$1,796 $3,700 ---87,992 | $890.12 plus 33% --S3,700 $7,992 ---$8,025 | $2,306.38 plus 35% ---$7,992 $8,025 $2,317.93 plus 39.6% ---$8,025 $356.90 $442.02 $484.02 $630.00

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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