Gen Combo Ll Financial Accounting Fundamentals; Connect Access Card
Gen Combo Ll Financial Accounting Fundamentals; Connect Access Card
7th Edition
ISBN: 9781260581256
Author: John Wild
Publisher: McGraw-Hill Education
Question
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Chapter 9, Problem 3PSB
To determine

Tax:

It is a compulsory financial charge imposed by government on individuals and corporate, failure to pay which invites legal actions.

1.

Employee’s FICA for social security.

Expert Solution
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Explanation of Solution

Employee’s FICA for social security

Formula to calculate FICA for social security,

  FICASocialsecuritytax=6.2%×paytill$118,500

For A

Substitute $1600 for pay.

  FICASocialsecuritytax=6.2%×$1,600=$99.20

For C

Substitute $1,515 for pay.

  FICASocialsecuritytax=6.2%×$1,515=$93.93

For J

Substitute $475 for pay.

  FICASocialsecuritytax=6.2%×$475=$29.45

For M

Substitute $1,000 for pay.

  FICASocialsecuritytax=6.2%×$1,000=$62

Thus, FICA for social security of A is $99.20, C is $93.93, J is $29.45 and M is $62.

2.

To determine

Employee’s FICA Medicare taxes.

2.

Expert Solution
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Explanation of Solution

Employee’s FICA Medicare taxes

Formula to calculate FICA Medicare taxes,

  FICA Medicare taxes=1.45%×grosspay

For A

Substitute $2,500 for gross pay.

  FICA Medicare taxes=1.45%×$2,500=$36.25

For C

Substitute $1,515 for gross pay.

  FICA Medicare taxes=1.45%×$1,515=$21.95

For J

Substitute $475 for gross pay.

  FICA Medicare taxes=1.45%×$475=$6.89

For M

Substitute $1,000 for gross pay.

  FICA Medicare taxes=1.45%×$1,000=$14.50

Thus, FICA Medicare taxes for A are $36.25, Care $21.95, J are $6.89 and M are $14.50.

3.

To determine

Employer’s FICA for social security.

3.

Expert Solution
Check Mark

Explanation of Solution

Employer’s FICA for social security

Formula to calculate FICA for social security,

  FICASocialsecuritytax=6.2%×paytill$118,500

For A

Substitute $1,600 for pay.

  FICASocialsecuritytax=6.2%×$1,600=$99.20

For C

Substitute $1,515 for pay.

  FICASocialsecuritytax=6.2%×$1,515=$93.93

For J

Substitute $475 for pay.

  FICASocialsecuritytax=6.2%×$475=$29.45

For M

Substitute $1,000 for pay.

  FICASocialsecuritytax=6.2%×$1,000=$62

Thus, FICA for social security of A is $99.20, Cis $93.93, J is $29.45 and M is $62.

4.

To determine

Employer’s FICA Medicare taxes

4.

Expert Solution
Check Mark

Explanation of Solution

Employer’s FICA Medicare taxes

Formula to calculate FICA Medicare taxes,

  FICA Medicare taxes=1.45%×grosspay

For A

Substitute $2,500 for gross pay.

  FICA Medicare taxes=1.45%×$2,500=$36.25

For C

Substitute $1,515 for gross pay.

  FICA Medicare taxes=1.45%×$1,515=$21.95

For J

Substitute $475 for gross pay.

  FICA Medicare taxes=1.45%×$475=$6.89

For M

Substitute $1,000 for gross pay.

  FICA Medicare taxes=1.45%×$1,000=$14.50

Thus, FICA Medicare taxes for A are $36.25, C are $21.95, J are $6.89 and M are $14.50.

5.

To determine

Employer’s FUTA taxes.

5.

Expert Solution
Check Mark

Explanation of Solution

Employer’s FUTA taxes

Formula to calculate FUTA taxes,

  FUTAtaxes=0.6%×paytill$7,000

For A

Substitute $0 for pay.

  FUTAtaxes=0.6%×0=0

For C

Substitute $0 for pay.

  FUTAtaxes=0.6%×0=0

For J

Substitute $350 for pay.

  FUTAtaxes=0.6%×$350=2.10

For M

Substitute $0 for pay.

  FUTAtaxes=0.6%×0=0

Thus, FUTA taxes for A are 0, C are 0, J are $2.10 and M are 0.

6.

To determine

Employer’s SUTA taxes

6.

Expert Solution
Check Mark

Explanation of Solution

Employer’s SUTA taxes

Formula to calculate SUTA taxes

  SUTAtaxes=2.15%×paytill$7,000

For A, substitute $0 for pay

  SUTAtaxes=2.15%×0=0

For C, substitute $0 for pay.

  SUTAtaxes=2.15%×0=0

For J, substitute $350 for pay.

  SUTAtaxes=2.15%×$350=$6.13

For M, substitute 0 for pay

  SUTAtaxes=2.15%×0=0

Thus, SUTA taxes for A are 0, C are 0, J are $6.130 and M are 0

7.

To determine

Employee’s net home pay

7.

Expert Solution
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Explanation of Solution

Employee’s net home pay

    EmployeesGross Pay($)Income Tax($)Social Security($)Medicare($)Health insurance($)Net Pay($)
    A2,50019899.2036.25252,141.55
    C1,51518293.9321.97251,192.10
    J4753229.456.8925381.66
    M1,000686214.5025830.50
    Total4,545.81

Table (1)

Thus, employee’s net pay is $4,545.81

8.

To determine

Employer’s total payroll related expense

8.

Expert Solution
Check Mark

Explanation of Solution

Employer’s total payroll related expense

    EmployeesGross Earning($)Social Security($)Medicare($)FUTA($)SUTA($)Health insurance($)Pension fundNet Pay($)
    D2,50099.2036.2500251252,785.45
    T1,51593.9321.97002575.751,731.65
    K47529.456.892.106.132523.75568.32
    C1,0006214.500025501,151.50
    Total6,236.92

Table (2)

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