Liam Wallace is general manager of Worldwide Salons. During 2018Wallace worked for the company all 18, 1 year at a $ 12,900 monthly salary. He also earned a year-end bonus equal to 15% of his annual salary Wallace's federal income tax withheld during 2018 was $1,161 per month, plus $2,322 on his bonus check. State income tax withheld came to $170 per month , plus $110 on the bonus . FICA tax was withheld on the annual earnings . Wallace authorized the following payroll deductions : Charity Fund contribution of 4% of total earnings and life insurance of $35 per month .Requirement 2. Compute Worldwide’s total 2018 payroll tax expense for Wallace. **Payroll Breakdown Overview****Net Pay:**- **Gross Pay:** $178,020**Withholding Deductions:**1. **Federal Income Tax**: [Amount to be filled in]2. **Employee Medicare Tax**: [Amount to be filled in]3. **Employee OASDI Tax**: [Amount to be filled in]4. **State Income Tax**: [Amount to be filled in]5. **Charity Fund Contribution**: [Amount to be filled in]6. **Life Insurance**: [Amount to be filled in]**Total Withholdings:**- [Amount to be filled in]**Net (Take-home) Pay:**- [Amount to be filled in]*This document outlines a sample payroll report, detailing the gross pay and various withholding deductions that will affect the net pay or take-home amount. The specific values for each deduction category are yet to be determined and listed.* For all payroll calculations, use the following tax rates and round amounts to the nearest cent:**Employee:**- OASDI: 6.2% on first $118,500 earned.- Medicare: 1.45% up to $200,000, 2.35% on earnings above $200,000.**Employer:**- OASDI: 6.2% on first $118,500 earned.- Medicare: 1.45% on all earnings.- FUTA: 0.6% on first $7,000 earned.- SUTA: 5.4% on first $7,000 earned.

The following calculations are done in the records of Liam Wallace to compute his net pay…

Answered: Liam Wallace is general manager of…

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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Liam Wallace is general manager of Worldwide Salons. During 2018Wallace worked for the company all 18, 1 year at a $ 12,900 monthly salary. He also earned a year-end bonus equal to 15% of his annual salary Wallace's federal income tax withheld during 2018 was $1,161 per month, plus $2,322 on his bonus check. State income tax withheld came to $170 per month , plus $110 on the bonus . FICA tax was withheld on the annual earnings . Wallace authorized the following payroll deductions : Charity Fund contribution of 4% of total earnings and life insurance of $35 per month . Requirement 2. Compute Worldwide’s total 2018 payroll tax expense for Wallace.

**Payroll Breakdown Overview**

**Net Pay:**
- **Gross Pay:** $178,020

**Withholding Deductions:**

1. **Federal Income Tax**: [Amount to be filled in]
2. **Employee Medicare Tax**: [Amount to be filled in]
3. **Employee OASDI Tax**: [Amount to be filled in]
4. **State Income Tax**: [Amount to be filled in]
5. **Charity Fund Contribution**: [Amount to be filled in]
6. **Life Insurance**: [Amount to be filled in]

**Total Withholdings:**
- [Amount to be filled in]

**Net (Take-home) Pay:**
- [Amount to be filled in]

*This document outlines a sample payroll report, detailing the gross pay and various withholding deductions that will affect the net pay or take-home amount. The specific values for each deduction category are yet to be determined and listed.*

For all payroll calculations, use the following tax rates and round amounts to the nearest cent:

**Employee:**
- OASDI: 6.2% on first $118,500 earned.
- Medicare: 1.45% up to $200,000, 2.35% on earnings above $200,000.

**Employer:**
- OASDI: 6.2% on first $118,500 earned.
- Medicare: 1.45% on all earnings.
- FUTA: 0.6% on first $7,000 earned.
- SUTA: 5.4% on first $7,000 earned.

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