Sky Co. employed Tom Mills in Year 1. Tom earned $5,300 per month and worked the entire yearAssume the Social Security tax rate is 6 percent for the first $130,000 of earnings, and the Medicare tax rate is 1,5 percent. Tom's federal income tax withholding amount is $890 per month. Use 5.4 percent for the state unemployment tax rate and 0.6 percent for the federal unemployment tax rate on the first $7,000 of earnings per employee. Assume that instead of $5,300 per month Tom earned $11,200 per month. Based on this new level of income Tom's new federal income tax withholding is $2,000. Answer the following questions 1. What is Tom's net pay per month from January - November. And net pay for December. 2. What amount does Tom pay monthly in FICA payroll taxes from January - November. And December. 3. What is the total payroll tax expense for Sky for January Year 1? February Year 1, March Year 1, December Year 1?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Sky Co. employed Tom Mills in Year 1. Tom earned $5,300 per month and worked the entire yearAssume the Social Security tax rate is 6 percent for the first $130,000 of earnings, and the Medicare tax rate is 1,5 percent. Tom's federal income tax withholding amount is $890 per month. Use 5.4 percent for the state unemployment tax rate and 0.6 percent for the federal unemployment tax rate on the first $7,000 of earnings per employee. Assume that instead of $5,300 per month Tom earned $11,200 per month. Based on this new level of income Tom's new federal income tax withholding is $2,000. Answer the following questions 1. What is Tom's net pay per month from January - November. And net pay for December. 2. What amount does Tom pay monthly in FICA payroll taxes from January - November. And December. 3. What is the total payroll tax expense for Sky for January Year 1? February Year 1, March Year 1, December Year 1?
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