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 Worldwide incurred payroll tax expense on Wallace for FICA tax . The company also paid state unemployment tax and federal unemployment tax . Requirement 2. Compute Worldwide's total 2018 payroll tax expense for Wallace. (Round all amounts to the nearest dollar.) For all payroll calculations, use the following tax rates and round amounts to the nearest cent:**Employee:**- **OASDI:** 6.2% on the first $118,500 earned- **Medicare:** 1.45% up to $200,000, 2.35% on earnings above $200,000**Employer:**- **OASDI:** 6.2% on the first $118,500 earned- **Medicare:** 1.45% on all earnings- **FUTA:** 0.6% on the first $7,000 earned- **SUTA:** 5.4% on the first $7,000 earned **Payroll Tax Components****Gross Pay**- A field for entering the total gross pay for the employee.**Employer Payroll Taxes:**- A dropdown or selection field is available for additional tax options.**FICA-OASDI**- A field for recording the employer's contribution to the Federal Insurance Contributions Act (FICA) for Social Security's Old-Age, Survivors, and Disability Insurance (OASDI).**FICA-Medicare**- A field for entering the employer's contribution to Medicare under FICA.**Total Employer Payroll Tax**- This field calculates the total of all employer payroll taxes including FICA-OASDI and FICA-Medicare.**Total Payroll Expense**- The final field computes the overall payroll expense, which includes gross pay and all employer tax contributions.

Particulars Amount Yearly salary(12900*12) 154800 Add: Bonus @15% of the annual salary 23220…

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

Worldwide incurred payroll tax expense on Wallace for FICA tax . The company also paid state unemployment tax and federal unemployment tax .

Requirement 2. Compute Worldwide's total 2018 payroll tax expense for Wallace. (Round all amounts to the nearest dollar.)

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

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

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

**Payroll Tax Components**

**Gross Pay**
- A field for entering the total gross pay for the employee.

**Employer Payroll Taxes:**
- A dropdown or selection field is available for additional tax options.

**FICA-OASDI**
- A field for recording the employer's contribution to the Federal Insurance Contributions Act (FICA) for Social Security's Old-Age, Survivors, and Disability Insurance (OASDI).

**FICA-Medicare**
- A field for entering the employer's contribution to Medicare under FICA.

**Total Employer Payroll Tax**
- This field calculates the total of all employer payroll taxes including FICA-OASDI and FICA-Medicare.

**Total Payroll Expense**
- The final field computes the overall payroll expense, which includes gross pay and all employer tax contributions.

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