Sky Company employed Tom Mills in Year 1. Tom earned $5,300 per month and worked the entire year. Assume the Social Security tax rate is 6 percent for the first $110,000 of earnings, and the Medicare tax rate is 1.5 percent. Tom's federal income tax withholding amount is $940 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. Required a. Answer the following questions. (1) What is Tom's net pay per month? (2) What amount does Tom pay monthly in FICA payroll taxes? (3) What is the total payroll tax expense for Sky Company for January Year 1? February Year 1? March Year 1? December Year 1? b. Assume that instead of $5,300 per month Tom earned $9,700 per month. Answer the following questions. (1) What is Tom's net pay per month? (2) What amount does Tom pay monthly in FICA payroll taxes? (3) What is the total payroll tax expense for Sky Company for January Year 1? February Year 1? March Year 1? December Year 1?
Sky Company employed Tom Mills in Year 1. Tom earned $5,300 per month and worked the entire year. Assume the Social Security tax rate is 6 percent for the first $110,000 of earnings, and the Medicare tax rate is 1.5 percent. Tom's federal income tax withholding amount is $940 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. Required a. Answer the following questions. (1) What is Tom's net pay per month? (2) What amount does Tom pay monthly in FICA payroll taxes? (3) What is the total payroll tax expense for Sky Company for January Year 1? February Year 1? March Year 1? December Year 1? b. Assume that instead of $5,300 per month Tom earned $9,700 per month. Answer the following questions. (1) What is Tom's net pay per month? (2) What amount does Tom pay monthly in FICA payroll taxes? (3) What is the total payroll tax expense for Sky Company for January Year 1? February Year 1? March Year 1? December Year 1?
College Accounting (Book Only): A Career Approach
13th Edition
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:Scott, Cathy J.
Chapter8: Employer Taxes, Payments, And Reports
Section: Chapter Questions
Problem 1PB
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Sky Company employed Tom Mills in Year 1. Tom earned $5,300 per month and worked the entire year. Assume the Social Security tax rate is 6 percent for the first $110,000 of earnings, and the Medicare tax rate is 1.5 percent. Tom's federal income tax withholding amount is $940 per month. Use 5.4 percent for the state
b. Assume that instead of $5,300 per month Tom earned $9,700 per month. Answer the following questions.
- What is Tom's net pay per month?
- What amount does Tom pay monthly in FICA payroll taxes?
- What is the total payroll tax expense for Sky Company for January Year 1? February Year 1? March Year 1? December Year 1?
Transcribed Image Text:Sky Company employed Tom Mills in Year 1. Tom earned $5,300 per month and worked the entire year. Assume the Social Security tax
rate is 6 percent for the first $110,000 of earnings, and the Medicare tax rate is 1.5 percent. Tom's federal income tax withholding
amount is $940 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.
Required
a. Answer the following questions.
(1) What is Tom's net pay per month?
(2) What amount does Tom pay monthly in FICA payroll taxes?
(3) What is the total payroll tax expense for Sky Company for January Year 1? February Year 1? March Year 1? December Year 1?
b. Assume that instead of $5,300 per month Tom earned $9,700 per month. Answer the following questions.
(1) What is Tom's net pay per month?
(2) What amount does Tom pay monthly in FICA payroll taxes?
(3) What is the total payroll tax expense for Sky Company for January Year 1? February Year 1? March Year 1? December Year 1?
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