Answered: Anderson Brown worked 39 hours during…

College Accounting (Book Only): A Career Approach

13th Edition

ISBN:9781337280570

Author:Scott, Cathy J.

Publisher:Scott, Cathy J.

Chapter7: Employee Earnings And Deductions

Section: Chapter Questions

Problem 1PB

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Question

1. Anderson Brown worked 39 hours during the first week of the calendar year and earns regular wages of $15/hour. She contributes 4% of gross pay to a 401(k) plan and $25/week to a dependent-care flexible spending account. Her Social Security tax for the week is $_____ .

2. Which statement about calculating taxable earnings for Social Security tax is accurate?

Answer:

401(k) contributions are taxable for Social Security tax and are subtracted from gross pay when calculating taxable earnings for that tax.

401(k) contributions are taxable for Social Security tax and are not subtracted from gross pay when calculating taxable earnings for that tax.

401(k) contributions are not taxable for Social Security tax and are subtracted from gross pay when calculating taxable earnings for that tax.

D.	401(k) contributions are not taxable for Social Security tax and are not subtracted from gross pay when calculating taxable earnings for that tax.

3. What is the maximum amount of dependent care benefits an employee who files as Single on his tax return can receive in a year?

Answer:

$2,500

$5,000

$7,500

$10,000

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