Marion Co. employed Juan Lopez in 2010. Juan earned $5,000 per month and worked the entire- year. 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. Juan's federal income tax withholding amount is $900 per month. Use 6.2 percent for the unemployment tax rate for the first $7,000 of earnings per employee. Required a. Answer the following questions: (1) What is Juan's net pay per month? (2) What amount does Juan pay monthly in FICA payroll taxes? (3) What is the total payroll tax expense for Marion Co. for January 2010? February 2010? March 2010? December 2010?

FINANCIAL ACCOUNTING
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Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Exercise 9-
culating employee
Marion Co. employed Juan Lopez in 2010. Juan earned $5,000 per month and worked the entire
year. 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. Juan's federal income tax withholding amount is $900 per month.
Use 6.2 percent for the unemployment tax rate for the first $7,000 of earnings per employee.
Required
a. Answer the following questions:
(1) What is Juan's net pay per month?
(2) What amount does Juan pay monthly in FICA payroll taxes?
(3) What is the total payroll tax expense for Marion Co. for January 2010? February 2010?
March 2010? December 2010?
b. Assume that instead of $5,000 per month Juan earned $9,500 per month. Answer the questions
in Requirement a.
Transcribed Image Text:Exercise 9- culating employee Marion Co. employed Juan Lopez in 2010. Juan earned $5,000 per month and worked the entire year. 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. Juan's federal income tax withholding amount is $900 per month. Use 6.2 percent for the unemployment tax rate for the first $7,000 of earnings per employee. Required a. Answer the following questions: (1) What is Juan's net pay per month? (2) What amount does Juan pay monthly in FICA payroll taxes? (3) What is the total payroll tax expense for Marion Co. for January 2010? February 2010? March 2010? December 2010? b. Assume that instead of $5,000 per month Juan earned $9,500 per month. Answer the questions in Requirement a.
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