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Mattola Company is giving each of its employees a holiday bonus of $100 on December 13 (a nonpayday). The company wants each employee’s check to be $100. The supplemental tax percent is used. a. What will be the gross amount of each bonus if each employee pays a state income tax of 2.8% (besides the other payroll taxes)? $_____ b. What would the net amount of each bonus check be if the company did not gross-up the bonus? $_____

Chapter 4, Problem 10PA
Textbook Problem

Mattola Company is giving each of its employees a holiday bonus of $100 on December 13 (a nonpayday). The company wants each employee’s check to be $100. The supplemental tax percent is used.

  1. a. What will be the gross amount of each bonus if each employee pays a state income tax of 2.8% (besides the other payroll taxes)?    $_____
  2. b. What would the net amount of each bonus check be if the company did not gross-up the bonus?    $_____

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Chapter 4 Solutions

PAYROLL ACCT.,2019 ED.(LL)-TEXT
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