Lisa Renet manages Seasons Catering Company. Her annual salary is $78,000, which is earned evenly over the
Question:
Lisa Renet manages Seasons Catering Company. Her annual salary is $78,000, which is earned evenly over the year. Each month, Renet has $1,200 in federal and state income taxes withheld. For simplicity, assume the FICA tax rate is 8% up to a maximum salary of $70,000. Assume that FUTA taxes are 6.2% on the first $7,000 of an employee's gross pay. Renet pays $50 per month for medical insurance; the company withholds this amount from her paycheck and also contributes an equal amount.
Required: (1) For the month of February, calculate
(a) Renet’s net pay and
(b) Seasons Catering Company’s salary expense and payroll tax expense associated with Renet’s employment.
(2) For the month of December, calculate
(a) Renet’s net pay and
(b) Seasons Catering Company’s salary expense and payroll tax expense associated with Renet’s employment.
(3) Are the amounts you calculated in (1) the same as the amounts you calculated in (2)? Why or why not?
TYK-1
Step by Step Answer:
Accounting Information For Business Decisions
ISBN: 9780030224294
1st Edition
Authors: Billie Cunningham, Loren A. Nikolai, John Bazley