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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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Mike Mays is a waiter at the Dixie Hotel. In his first weekly pay in March, he earned $360.00 for the 40 hours he worked. In addition, he reports his tips for February to his employer ($700.00), and the employer withholds the appropriate taxes for the tips from this first pay in March. Calculate his net take-home pay assuming the employer withheld federal income tax (wage-bracket, married filing jointly), social security taxes, and state income tax (2%). Enter deductions beginning with a minus sign (-). Round interim amounts to two decimal places. Use these values in subsequent computations then round final answer to two decimal places. As we go to press, the federal income tax rates for 2022 are being determined by budget talks in Washington and not available for publication. For this edition, the 2021 federal income tax tables for Manual Systems with Forms W-4 from 2020 or later with Standard Withholding and 2021 FICA rates have been used. Click here to access the Wage-Bracket Method Tables. 360 ✔ Gross pay Federal income tax Social security taxes - OASDI Social security taxes - HI State income tax Net pay Feedback Check My Work -95.40 X -65.72 ✔ -15.37 -21.20 162.31 X Calculate net pay, when gross pay includes wages and tips. Use Wage-Bracket Tables to calculate federal income taxes.
Transcribed Image Text:Mike Mays is a waiter at the Dixie Hotel. In his first weekly pay in March, he earned $360.00 for the 40 hours he worked. In addition, he reports his tips for February to his employer ($700.00), and the employer withholds the appropriate taxes for the tips from this first pay in March. Calculate his net take-home pay assuming the employer withheld federal income tax (wage-bracket, married filing jointly), social security taxes, and state income tax (2%). Enter deductions beginning with a minus sign (-). Round interim amounts to two decimal places. Use these values in subsequent computations then round final answer to two decimal places. As we go to press, the federal income tax rates for 2022 are being determined by budget talks in Washington and not available for publication. For this edition, the 2021 federal income tax tables for Manual Systems with Forms W-4 from 2020 or later with Standard Withholding and 2021 FICA rates have been used. Click here to access the Wage-Bracket Method Tables. 360 ✔ Gross pay Federal income tax Social security taxes - OASDI Social security taxes - HI State income tax Net pay Feedback Check My Work -95.40 X -65.72 ✔ -15.37 -21.20 162.31 X Calculate net pay, when gross pay includes wages and tips. Use Wage-Bracket Tables to calculate federal income taxes.
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