CHAPTER 8 Applying Youn Knowledge 307 Marital Total Weekly Earnings $447.60 Number of Allowances Amount of Withholding Status (a) (b) (c) (d) 2. 451.50 M. 481.15 490.52 2. (e) 691.89 E 8-4A / 3d row, Soc. Sec. tax: $161.20 (LO2) CALCULATING SOCIAL SECURITY AND MEDICARE TAXES Assume a Social Security tax rate of 6.2% is applied to maximum earnings of $128,400 and a Medicare tax rate of 1.45% is applied to all earnings. Calculate the Social Security and Medicare taxes for the following situations: (128400-125800)x6.22 Cumul. Pay Before Current Current Amount COver Amount Medicare Soc. Sec. Тах Subject to Soc. Sec. Gross Soc. Sec. Maximum Year-to-Date Max. Тах Weekly Payroll $ 22,000 Withheld Withheld Pay $1,700 Earnings Soc. Sec. 105.40 260.40 161.20 223.20 6670 24.65 60.90 56.91 $128,400 54,000 4,200 128,400 125,800 3,925 128,400 127,800 4,600 128,400 nig COMPUTING NET PAY Mary Sue Guild works for a company that pays its employ- ees 1½ times the regular rate for all hours worked in excess of 40 per week. Guild’s pay rate is $14.50 per hour. Her wages are subject to deductions for federal income 00.21 tax, Social Security tax, and Medicare tax. She is married and claims four withhold- 000ing allowances. Guild has a 2-hour lunch break during an 8½-hour day. Her time E 8-5A / Net pay: $639.15 (LO2) card is shown below. 00.2 LC0Name Mary Sue Guild Week Ending March 30, 20-- 00.08 Hours Worked 00 In Out In Out Day Regular Overtime 00.001 12:35 4:33 8. 7:57 12:05 7:52 12:09 12:39 5:05 12:15 12:45 5:30 7:59 12:30 6:31 8. 8:00 12:01 12:34 4:30 8. 7:56A 2 12:05 22 8:00 10:31 bieg (continued d no onS olge MTWTES Accounting for Cash and Payroll Complete the following for the week: (a) to regular hours × $14.50 per hour $ _ 580 130.5 (Ь) overtime hours × $21.75 per hour %$4 $4 (c) Total gross wages $_710,5 (d) Federal income tax withholding (from tax tables in Figure 8-4, pages 288 and 289) 16 24 (e) Social Security withholding at 6.2% $_44.05 $_10.30 (f) Medicare withholding at 1.45% TAJ (g) Total withholding $_'70. (h) Net pay $640.15 JOURNALIZING PAYROLL TRANSACTIONS On December 31, the payroll register of Hamstreet Associates indicated the following information: