### Payroll Tax Calculation Example**Scenario:**John Waits owns a small shop with two employees. The payroll details for a specific period are as follows:- **Total withholding tax for all employees**: $1,548- **Total employees' Social Security tax**: $177- **Total employer's Social Security tax**: $251- **Total employees' Medicare tax**: $109**Question:**How much must John deposit as the employer's share of Social Security tax and Medicare tax? What is the total tax that must be deposited?**Solution Steps:**1. **Calculate the Employer’s Share of Taxes:** - Employer's Social Security tax: $251 - Employer's Medicare tax: (not given directly, but usually calculated based on the percentage rate applied to employee wages) Since the total employees' Medicare tax is $109, the employer's Medicare tax is typically equal to this amount. Therefore, the Employer's Medicare tax = $109 The total employer’s share of Social Security and Medicare tax is: \[ \text{Employer's Social Security tax} + \text{Employer's Medicare tax} = 251 + 109 = 360 \]2. **Total Tax to be Deposited:** - Total withholding tax for all employees: $1,548 - Total employer’s share: $360 The total tax that must be deposited is: \[ \text{Total withholding tax} + \text{Employer's share} = 1,548 + 360 = 1,908 \]**Summary of Answer:**- John must deposit $360 as the employer's share of Social Security tax and Medicare tax.- The total tax that must be deposited is $1,908.

Taxes are mandatory payments placed on individuals or businesses by a government agency, whether…

John Waits owns a small shop with two employees. For one payroll period the total withholding tax for all employees was $1,548. The total employees' Social Security tax was $177 and the total employer's Social Security tax was $251. The total employees' Medicare tax was $109 How much must John deposit as the employer's share of Social Security tax and Medicare tax? What is the total tax that must be deposited? John must deposit S as the employer's share of Social Security tax and Medicare tax. (Simplify your answer.) The total tax that must be deposited is $ (Simplify your answer.)

John Waits owns a small shop with two employees. For one payroll period the total withholding tax for all employees was $1,548. The total employees' Social Security tax was $177 and the total employer's Social Security tax was $251. The total employees' Medicare tax was $109 How much must John deposit as the employer's share of Social Security tax and Medicare tax? What is the total tax that must be deposited? John must deposit S as the employer's share of Social Security tax and Medicare tax. (Simplify your answer.) The total tax that must be deposited is $ (Simplify your answer.)

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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