Explanation Gross pay: The total amount earned by an employee in the form of salary, or wages, or commission, and bonus, before any taxes or deductions, is referred to as gross pay. Net pay: Net pay is the amount of gross pay after deduction of taxes, and any other deductions. Withheld income tax: The amount of income taxes deducted or withheld from gross pay is referred to as withheld income tax. Federal Insurance Contributions Act (FICA) tax: Federal government imposes taxes on the employees’ pay to provide benefits to retired, old age, orphans, and disabled. This tax is also referred to as Social Security tax because the program is devised to benefit the society. FICA tax includes two components, OASDI (Old age, survivors, and disability insurance), and Medicare (health insurance). 6.2 % is levied as OASDI component, and 1.45% as Medicare component. So, the total of FICA tax rate is 7.65% ( 6.2 % + 1.45 % ) , for all the employees on the first $118,500 of earnings, and another 1.45% on the earnings above $118,500. Calculate MG’s gross pay for the month of December . Details Amount ($) Amount ($) Base monthly salary $1,300 Sales made by G $115,000 Commission percentage × 8% Commission 9,200 Gross pay $10,500 Table (1) Calculate MG’s net pay for the month of December

Financial Accounting, Student Value Edition (4th Edition)

4th Edition

ISBN: 9780134114811

Author: Robert Kemp, Jeffrey Waybright

Publisher: PEARSON

See similar textbooks

Concept explainers

The Effect Of Prepaid Taxes On Assets And Liabilities

Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can resu…

Final Accounts

Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.

Ledger Posting

A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the a…

Trial Balance and Final Accounts

In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately…

Adjustment Entries

At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial repor…

Videos

Question

Chapter 9.A, Problem 8BE

To determine

Ascertain MG’s gross pay and net pay for the month of December.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Chapter 9.A, Problem 7BE

Chapter 9.A, Problem 9BE

Students have asked these similar questions

The costs will be allocated based on the number of employees using the direct method.

do fast answer please

What are the days to collect from customers?

Chapter 9 Solutions

Financial Accounting, Student Value Edition (4th Edition)

Ch. 9.A - Calculate employee payroll (Learning Objective 8)...Ch. 9.A - Calculate net pay (Learning Objective 8) 5-10 min....Ch. 9.A - Employer payroll costs (Learning Objective 8) 5-10...Ch. 9.A - Prob. 4AE Ch. 9.A - Prob. 5AE Ch. 9.A - Prob. 6AE Ch. 9.A - Prob. 7BE Ch. 9.A - Prob. 8BE Ch. 9.A - Calculating gross and net pay (Learning Objective...Ch. 9.A - Prob. 10AP

Ch. 9.A - Prob. 11BP Ch. 9 - Prob. 1DQ Ch. 9 - Prob. 2DQ Ch. 9 - Prob. 3DQ Ch. 9 - Prob. 4DQ Ch. 9 - What is the distinguishing feature of the...Ch. 9 - Prob. 6DQ Ch. 9 - Will interest expense be more than, less than, or...Ch. 9 - Prob. 8DQ Ch. 9 - What are the differences between an operating...Ch. 9 - Prob. 10DQ Ch. 9 - Known liabilities of uncertain amounts should be...Ch. 9 - Prob. 2SC Ch. 9 - Prob. 3SC Ch. 9 - Prob. 4SC Ch. 9 - Which term is used to describe an unsecured bond?...Ch. 9 - Prob. 6SC Ch. 9 - Plavix Corporations bonds payable carry a stated...Ch. 9 - Prob. 8SC Ch. 9 - Martin s bonds pay interest semiannually on July 1...Ch. 9 - Prob. 10SC Ch. 9 - Prob. 11SC Ch. 9 - Prob. 12SC Ch. 9 - Prob. 1SE Ch. 9 - Prob. 2SE Ch. 9 - Prob. 3SE Ch. 9 - Prob. 4SE Ch. 9 - Prob. 5SE Ch. 9 - Prob. 6SE Ch. 9 - Bond terms (Learning Objective 5) 5-10 min. Match...Ch. 9 - Determining the issue price for bonds (Learning...Ch. 9 - Prob. 9SE Ch. 9 - Prob. 10SE Ch. 9 - Prob. 11SE Ch. 9 - Prob. 12SE Ch. 9 - Prob. 13SE Ch. 9 - Prob. 14SE Ch. 9 - Prob. 15SE Ch. 9 - Prob. 16AE Ch. 9 - Prob. 17AE Ch. 9 - Prob. 18AE Ch. 9 - Prob. 19AE Ch. 9 - Prob. 20AE Ch. 9 - Prob. 21AE Ch. 9 - Prob. 22AE Ch. 9 - Prob. 23AE Ch. 9 - Prob. 24AE Ch. 9 - Prob. 25AE Ch. 9 - Prob. 26AE Ch. 9 - Prob. 27BE Ch. 9 - Prob. 28BE Ch. 9 - Prob. 29BE Ch. 9 - Prob. 30BE Ch. 9 - Prob. 31BE Ch. 9 - Prob. 32BE Ch. 9 - Prob. 33BE Ch. 9 - Prob. 34BE Ch. 9 - Prob. 35BE Ch. 9 - Prob. 36BE Ch. 9 - Prob. 37BE Ch. 9 - Prob. 38AP Ch. 9 - Prob. 39AP Ch. 9 - Prob. 40AP Ch. 9 - Prob. 41AP Ch. 9 - Prob. 42AP Ch. 9 - Prob. 43AP Ch. 9 - Prob. 44AP Ch. 9 - Prob. 45BP Ch. 9 - Prob. 46BP Ch. 9 - Prob. 47BP Ch. 9 - Prob. 48BP Ch. 9 - Prob. 49BP Ch. 9 - Prob. 50BP Ch. 9 - Prob. 51BP Ch. 9 - Prob. 1CE Ch. 9 - Prob. 1CP Ch. 9 - Prob. 1CFSAP Ch. 9 - Prob. 1EIA Ch. 9 - Case 2. Sherry Talbot, the CEO of Talbot...Ch. 9 - Prob. 1FA Ch. 9 - Prob. 1IA Ch. 9 - Small-Business Analysis Purpose: To help you...Ch. 9 - Prob. 1WC

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Ascertain MG’s gross pay and net pay for the month of December.

Solution Summary: The author calculates MG's gross pay and net pay for the month of December. The Federal Insurance Contributions Act (FICA) tax includes two components, OASDI and Medicare.

Concept explainers

Videos

Ascertain MG’s gross pay and net pay for the month of December.

Want to see the full answer?

Chapter 9 Solutions