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Old Town Entertainment has two employees in Year 1. Clay earns $3,600 per month, and Philip, the manager, earns $10,600 per m Neither is paid extra for working overtime. Assume the Social Security tax rate is 6 percent on the first $130,000 of earnings and th Medicare tax rate is 1.5 percent on all earnings. The federal income tax withholding is 13 percent of gross earnings for Clay and 20 percent for Philip. Both Clay and Philip have been employed all year.

Old Town Entertainment has two employees in Year 1. Clay earns $3,600 per month, and Philip, the manager, earns $10,600 per m Neither is paid extra for working overtime. Assume the Social Security tax rate is 6 percent on the first $130,000 of earnings and th Medicare tax rate is 1.5 percent on all earnings. The federal income tax withholding is 13 percent of gross earnings for Clay and 20 percent for Philip. Both Clay and Philip have been employed all year.

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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D1.

 

Req A and B Clay Box 1 Box 2 Box 3 Box 4 Box 5 Box 6 Req C What amounts will Old Town report on the Year 1 W-2s for each employee? (Do not round Amount Appearing on W-2 for Year 1 Philip Box 1 Box 2 Box 3 Box 4 Box 5 Box 6 Req D Wages, tips, and other compensation Federal income tax withheld Social security wages Social security tax withheld Medicare wages and tips Medicare tax withheld Wages, tips, and other compensation Federal income tax withheld Social security wages Social security tax withheld Medicare wages and tips Medicare tax withheld 55,200 X 8,280 X 55,200 X 3,312 55,200 x 828 X 127,200 22,896 X 127,200 7,632 127,200 1,908
Transcribed Image Text:Req A and B Clay Box 1 Box 2 Box 3 Box 4 Box 5 Box 6 Req C What amounts will Old Town report on the Year 1 W-2s for each employee? (Do not round Amount Appearing on W-2 for Year 1 Philip Box 1 Box 2 Box 3 Box 4 Box 5 Box 6 Req D Wages, tips, and other compensation Federal income tax withheld Social security wages Social security tax withheld Medicare wages and tips Medicare tax withheld Wages, tips, and other compensation Federal income tax withheld Social security wages Social security tax withheld Medicare wages and tips Medicare tax withheld 55,200 X 8,280 X 55,200 X 3,312 55,200 x 828 X 127,200 22,896 X 127,200 7,632 127,200 1,908
Old Town Entertainment has two employees in Year 1. Clay earns $3,600 per month, and Philip, the manager, earns $10,600 per m Neither is paid extra for working overtime. Assume the Social Security tax rate is 6 percent on the first $130,000 of earnings and th Medicare tax rate is 1.5 percent on all earnings. The federal income tax withholding is 13 percent of gross earnings for Clay and 20 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. Req A and B Req C Req 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.); a. Clay a. Philip b. Clay b. Philip $ S $ $ Answer is complete but not entirely correct. Net Pay 3,600.00 x 10,600.00 2,565.00 7,791.00 < Prev 8 of 11 Next >
Transcribed Image Text:Old Town Entertainment has two employees in Year 1. Clay earns $3,600 per month, and Philip, the manager, earns $10,600 per m Neither is paid extra for working overtime. Assume the Social Security tax rate is 6 percent on the first $130,000 of earnings and th Medicare tax rate is 1.5 percent on all earnings. The federal income tax withholding is 13 percent of gross earnings for Clay and 20 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. Req A and B Req C Req 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.); a. Clay a. Philip b. Clay b. Philip $ S $ $ Answer is complete but not entirely correct. Net Pay 3,600.00 x 10,600.00 2,565.00 7,791.00 < Prev 8 of 11 Next >
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