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Old Town Entertainment has two employees in Year 1. Clay earns $3,600 per month, and Philip, the manager, earns $10,400 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 15 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.

Old Town Entertainment has two employees in Year 1. Clay earns $3,600 per month, and Philip, the manager, earns $10,400 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 15 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.

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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Old Town Entertainment has two employees in Year 1. Clay earns $3,600 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 15 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.) Net Pay a. Clay a. Philip b. Clay b. Philip
Transcribed Image Text:Old Town Entertainment has two employees in Year 1. Clay earns $3,600 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 15 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.) Net Pay a. Clay a. Philip b. Clay b. Philip
Old Town Entertainment has two employees in Year 1. Clay earns $3,600 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 15 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 Is the net pay the same in March and December for both employees? Is the net pay the same in March and December for both employees? Req A and B Req C Show Transcribed Text Clay Box 1 Box 2 Box Box 4 Box 5 Box 6 Req D Philip Box 1 Box 2 Box 3 Box 4 Box 5 Box 6 Req C Req D What amounts will Old Town report on the Year 1 W-2s for each employee? (Do not round intermediate calculations.) Amount Appearing on W-2 for Year 1 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 S Social security wages Social security tax withheld Medicare wages and tips Medicare tax withheld Ć
Transcribed Image Text:Old Town Entertainment has two employees in Year 1. Clay earns $3,600 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 15 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 Is the net pay the same in March and December for both employees? Is the net pay the same in March and December for both employees? Req A and B Req C Show Transcribed Text Clay Box 1 Box 2 Box Box 4 Box 5 Box 6 Req D Philip Box 1 Box 2 Box 3 Box 4 Box 5 Box 6 Req C Req D What amounts will Old Town report on the Year 1 W-2s for each employee? (Do not round intermediate calculations.) Amount Appearing on W-2 for Year 1 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 S Social security wages Social security tax withheld Medicare wages and tips Medicare tax withheld Ć
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