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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

Erin Chang, an employee of Solutions Company, worked 48 hours during the week of October 12 through 18. Her rate of pay is $17.50 per hour, and she receives time-and-a-half for all work in excess of 40 hours per week. Chang is married and claims two allowances on her W-4 form. Her wages are subject to the following deductions:

  1. a. Federal income tax (use the table in Figure 3, pages 293-294).
  2. b. Social Security tax at 6.2 percent.
  3. c. Medicare tax at 1.45 percent.
  4. d. Union dues, $32.

Required

Compute Chang’s regular pay, overtime pay, gross pay, and net pay.

To determine

Calculate the regular pay, overtime pay, gross pay and net pay of Person E.

Explanation

Payroll:

Payroll refers to the total amount that is required to be paid by the company to its employees during a week, month or other period. It is the financial record of the wages and bonus, net pay, salary and deductions of a company’s employees.

Calculate the regular pay, overtime pay, gross pay and net pay of Person E.

ParticularsHours×RateAmount in $
Regular pay40×$17.50 $700.00
Overtime pay 8×(1) $26.25$210.00
Gross pay   $910.00

(Table 1)

Particulars Amount in $
Gross pay $910.00
Less: Federal income tax$71.00 
           Social Security tax  ($910.00×6.2%)$56.42 
           Medicare tax ($910

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