Old Town Entertainment has two employees in Year 1. Clay earns $3,800 per month, and Philip,...

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Old Town Entertainment has two employees in Year 1. Clay earns $3,800 per month, and Philip, the manager, earns $10,500 per month. Neither is paid extra for working overtime. Assume the Social Security tax rate is 6 percent on the first $130,000 of earnings and the Medicare tax rate is 1.5 percent on all earnings. The federal income tax withholding is 13 percent of gross earnings for Clay and 20 percent for Philip. Both Clay and Philip have been employed all year. Required a. Calculate the net pay for both Clay and Philip for March. b. Calculate the net pay for both Clay and Philip for December. c. Is the net pay the same In March and December for both employees? d. What amounts will Old Town report on the Year 1 W-2s for each employee? Complete this question by entering your answers in the tabs below. Req A and B Req C Req D What amounts will Old Town report on the Year 1 W-2s for each employee? (Do not round intermediate calculations.) Amount Appearing on W-2 for Year 1 Wages, tips, and other compensation Clay Box 1 Box 2 Federal income tax withheld Box 3 Social security wages Box 4 Social security tax withheld Box 5 Medicare wages and tips Box 6 Medicare tax withheld Philip Box 1 Wages, tips, and other compensation Box 2 Federal income tax withheld Box 3 Social security wages Box 4 Social security tax withheld Box 5 Medicare wages and tips Box 6 Medicare tax withheld Old Town Entertainment has two employees in Year 1. Clay earns $3,800 per month, and Philip, the manager, earns $10,500 per month. Neither is paid extra for working overtime. Assume the Social Security tax rate is 6 percent on the first $130,000 of earnings and the Medicare tax rate is 1.5 percent on all earnings. The federal income tax withholding is 13 percent of gross earnings for Clay and 20 percent for Philip. Both Clay and Philip have been employed all year. Required a. Calculate the net pay for both Clay and Philip for March. b. Calculate the net pay for both Clay and Philip for December. c. Is the net pay the same In March and December for both employees? d. What amounts will Old Town report on the Year 1 W-2s for each employee? Complete this question by entering your answers in the tabs below. Req A and B Req C Req D What amounts will Old Town report on the Year 1 W-2s for each employee? (Do not round intermediate calculations.) Amount Appearing on W-2 for Year 1 Wages, tips, and other compensation Clay Box 1 Box 2 Federal income tax withheld Box 3 Social security wages Box 4 Social security tax withheld Box 5 Medicare wages and tips Box 6 Medicare tax withheld Philip Box 1 Wages, tips, and other compensation Box 2 Federal income tax withheld Box 3 Social security wages Box 4 Social security tax withheld Box 5 Medicare wages and tips Box 6 Medicare tax withheld

Answer rating: 100% (QA)

Answer To calculate the net pay for both Clay and Philip for March and December we need to follow these steps 1 Calculate the gross pay for each emplo... View the full answer