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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

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Chapter
Section
BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

Joyce Lee earns $30,000 a year. Her employer pays a matching Social Security tax of 6.2% on the first $128,400 in earnings, a Medicare tax of 1.45% on gross earnings, and a FUTA tax of 0.6% and a SUTA tax of 5.4%, both on the first $7,000 in earnings. What is the total cost of Joyce Lee to her employer?

  1. (a) $32,295
  2. (b) $30,000
  3. (c) $30,420
  4. (d) $32,715

To determine

Calculate the total cost of Person J to the employer.

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 total cost of Person J to the employer.

ParticularsAmount
Gross wages$30,000
Add: Employer Social Security tax ($30,000×6.2%s)$1,860
        Employer Medicare tax ($30,000×1

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