Bailey Dry Cleaners has six employees who were paid the following wages during 2019: Frank Johnson Frank Johnson $27,000 Bill Long 18,000 Duff Morse 130,000 Laura Stewart 28,000 Cindy Sharpe 26,000 Melissa Ledbetter 20,000 Total $249,000 The state allows the company a 1% unemployment compensation merit-rating reduction from the normal rate of 5.4%. The federal unemployment rate is 0.6%. The maximum unemployment wages per employee are $7,000 for both the state and the federal government. Income tax withholdings of 20% are applied to all employees. A F.I.C.A. tax rate of 8% on the employee and 8% on the employer is applie
Bailey Dry Cleaners has six employees who were paid the following wages during 2019: Frank Johnson Frank Johnson $27,000 Bill Long 18,000 Duff Morse 130,000 Laura Stewart 28,000 Cindy Sharpe 26,000 Melissa Ledbetter 20,000 Total $249,000 The state allows the company a 1% unemployment compensation merit-rating reduction from the normal rate of 5.4%. The federal unemployment rate is 0.6%. The maximum unemployment wages per employee are $7,000 for both the state and the federal government. Income tax withholdings of 20% are applied to all employees. A F.I.C.A. tax rate of 8% on the employee and 8% on the employer is applie
Chapter5: Unemployment Compensation Taxes
Section: Chapter Questions
Problem 8PB: During 2019, Jake Gore worked for two different employers. Until May, he worked for Wonderman...
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Bailey Dry Cleaners has six employees who were paid the following wages during 2019:
| Frank Johnson |
| Frank Johnson | $27,000 |
| Bill Long | 18,000 |
| Duff Morse | 130,000 |
| Laura Stewart | 28,000 |
| Cindy Sharpe | 26,000 |
| Melissa Ledbetter | 20,000 |
| Total | $249,000 |
The state allows the company a 1% unemployment compensation merit-rating reduction from the normal rate of 5.4%. The federal unemployment rate is 0.6%. The maximum unemployment wages per employee are $7,000 for both the state and the federal government. Income tax withholdings of 20% are applied to all employees. A F.I.C.A. tax rate of 8% on the employee and 8% on the employer is applied to the first $128,400 of each employee’s wages.
| Required: | |
| 1. | Calculate the amount of payroll taxes to be paid by Bailey. |
| 2. | Prepare the |
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