Old Town Entertainment has two employees in Year 1. Clay earns $3,500 per month, and Philip, the manager, earns $10,400 per month. Neither is paid extra for working overtime. Assume the Social Security tax rate is 6 percent on the first $130,000 of earnings and the Medicare tax rate is 1.5 percent on all earnings. The federal income tax withholding is 16 percent of gross earnings for Clay and 21 percent for Philip. Both Clay and Philip have been employed all year. Required a. Calculate the net pay for both Clay and Philip for March. b. Calculate the net pay for both Clay and Philip for December. c. Is the net pay the same in March and December for both employees? d. What amounts will Old Town report on the Year 1 W-2s for each employee? Complete this question by entering your answers in the tabs below. Reg A and B Req C a. Clay a Philip b. Clay b. Philip Reg D Calculate the net pay for both Clay and Philip for March. Calculate the net pay for both Clay and Philip for December. (Do not round intermediate calculations and round your answers to 2 decimal places.) Net Pay Cexand ReqC >

Old Town Entertainment has two employees in Year 1. Clay earns $3,500 per month, and Philip, the manager, earns $10,400 per month. Neither is paid extra for working overtime. Assume the Social Security tax rate is 6 percent on the first $130,000 of earnings and the Medicare tax rate is 1.5 percent on all earnings. The federal income tax withholding is 16 percent of gross earnings for Clay and 21 percent for Philip. Both Clay and Philip have been employed all year. Required a. Calculate the net pay for both Clay and Philip for March. b. Calculate the net pay for both Clay and Philip for December. c. Is the net pay the same in March and December for both employees? d. What amounts will Old Town report on the Year 1 W-2s for each employee? Complete this question by entering your answers in the tabs below. Reg A and B Req C a. Clay a Philip b. Clay b. Philip Reg D Calculate the net pay for both Clay and Philip for March. Calculate the net pay for both Clay and Philip for December. (Do not round intermediate calculations and round your answers to 2 decimal places.) Net Pay Cexand ReqC >

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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