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d. What amounts will Mega Mart report on the 2010 W-2s for each employee?

d. What amounts will Mega Mart report on the 2010 W-2s for each employee?

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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LO 5 Exercise 9-10A Calculating payroll Mega Mart has two employees in 2010. Marsha earns $4,200 per month and Tom, the manager, earns $10,000 per month. Neither is paid extra if they work overtime. Assume the Social Security tax rate is 6 percent on the first $110,000 of earnings and the Medicare tax rate is 1.5 percent on all earnings. The federal income tax withholding is 15 percent of gross earnings for Marsha and 20 percent for Tom. Both Marsha and Tom have been employed all year. Required a. Calculate the net pay for both Marsha and Tom for March. b. Calculate the net pay for both Marsha and Tom for December. c. Is the net pay the same in March as December for both employees? Why or why not? d. What amounts will Mega Mart report on the 2010 W-2s for each employee?
Transcribed Image Text:LO 5 Exercise 9-10A Calculating payroll Mega Mart has two employees in 2010. Marsha earns $4,200 per month and Tom, the manager, earns $10,000 per month. Neither is paid extra if they work overtime. Assume the Social Security tax rate is 6 percent on the first $110,000 of earnings and the Medicare tax rate is 1.5 percent on all earnings. The federal income tax withholding is 15 percent of gross earnings for Marsha and 20 percent for Tom. Both Marsha and Tom have been employed all year. Required a. Calculate the net pay for both Marsha and Tom for March. b. Calculate the net pay for both Marsha and Tom for December. c. Is the net pay the same in March as December for both employees? Why or why not? d. What amounts will Mega Mart report on the 2010 W-2s for each employee?
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